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LIFE OF FRIEDRICH LIST 



EC 



LIFE OF 

FRIEDRICH LIST 

AM) 

SELECTIONS FROM HIS WRITINGS 



BY 

MARGARET E. HIRST 

LATE SCHOLAR OF NEWNHAM COLLEGE, CAMBRIDGE 
WITH AN INTRODUCTION BY 

F. W. HIRST 



< 

o 




LONDON 

SMITH, ELDER & CO., 15, WATERLOO PLACE 
1909 



PRINTED BY 

WILLIAM CLOWES AND SONS, LIMITED, 
LONDON AND BECCLES 



PREFACE 

SOME time ago the suggestion was made to me 
that, as the writings of Friedrich List, apart from 
the "National System," are little known in England 
and America, an annotated reprint of his letters on 
the "Outlines of American Political Economy" 
(written in 1827, during the early Protectionist con- 
troversy) might be of interest. The two pamphlets 
for Letters IX.-XI. form a separate Appendix- 
are rare, but the British Museum possesses copies. 
As the work progressed its scope insensibly 
grew, and to complete it translations of two 
other writings by List have been included. The 
memorial addressed to the German Federal Council 
in 1819 expounds his economic views before he 
experienced American conditions, and the Intro- 
duction to the "National System" (omitted in 
Mr. Lloyd's translation) gives his own summary 
of his later theories. An important collection 
of List's papers and manuscripts is preserved 
among the municipal archives in the tower of 
the Marienkirche at Reutlingen, his native town. 
The Alice Hopkinson Memorial Studentship (open 






xi PREFACE 

to former students of Newnham College) was 
awarded to me in 1907, and I availed myself of the 
opportunity to visit Germany, and to examine 
such of the Reutlingen papers as related to 
List's English and American experiences. Neither 
Hausser nor Jentsch, his German biographers, 
deal at much length with these episodes, and from 
the papers and from other sources I have been 
able, I believe, to give a more complete account 
of them than any which has yet appeared. I have 
also made use of material which I found during my 
researches in the University Library of Tubingen 
and the Royal Library at Stuttgart. 

It is a pleasant task to record my thanks to 
those, whether in England, Germany, or America, 
who have so freely helped me: at Tubingen, to 
Herr Ober-Bibliothekar Dr. Karl Geiger and to 
the late Professor von Schonberg, for my ready 
admission to the University Library, and to the 
former for much assistance there; at Reutlingen, 
to the Oberburgermeister and municipal officials, 
for facilities granted me in regard to the List- 
Archiv. Herr Oberfinanzrat Dr. Losch of Stutt- 
gart, who is an authority on all matters relating 
to List, was good enough to give me valuable 
information, and to lend me books which I could 
not otherwise have obtained. I am under a similar 
debt to Dr. Max Holtzel of Stuttgart and Professor 
K. W. Taussig of Harvard University. To Mrs. 



PREFACE vii 

Hopkinson, the donor of the studentship, I am 
also grateful for the constant and helpful interest 
she has shown in my work. My brother, besides 
contributing the Introduction, has helped the 
progress of the book in many ways. 

M. E. H. 

April, 1909. 



CONTENTS 



MM 

PREFACE .......... v 

INTRODUCTION ......... xi 



LIFE 

1. WURTTEMBERG, 1789-182; ..... I 

11. AMERICA, 1825-1830 ....... 29 

III. EUROPE, 1831-1846 ..... 72 

IV. CONCLUSION THE ECONOMIC TEACHING OF LIST . 109 



PETITION TO THE GERMAN FEDERAL ASSEMBLY ON BEHALF 

OF THE HANDELSVEREIN, 1819 13$ 

OUTLINES OF AMERICAN POLITICAL ECONOMY, 1827 . 145 

SPEECH TO THE PENNSYLVANIA SOCIETY .... 273 

INTRODUCTION TO THE NATIONAL SYSTEM, 1841 . . 287 

BIBLIOGRAPHY 319 

INDEX . 325 



IX 



INTRODUCTION 

BY far the greatest name in the short but rich 
and fruitful annals of economic science is that of 
its founder, Adam Smith. Very high am QDg h'*L 
successors, if our touchstone is to be_infT uenpp 
upon natlOnar policy, stands Friedrifh T ic a 
romantic figure, displaying, throughjall *h- Hi 



pointments and vicissitudes of ^_most disappoint- 
ing and vicissitudinous career, dauntless courage, 
heroic energy, and unquenchable enthusiasm. 

Whether the man of action or the man of 
thought is the more enviable, admirable, or power- 
ful, is a question of taste which every one must 
answer for himself. In the art and science of 
public finance as well as in the larger sphere of 
political economy there is plenty of scope for 
both for the pure theorist and for the states- 
man who is the practical interpreter, perhaps the 

I mere instrument, of other men's ideas. Between 
these two types between, say, a Ricardo and 
a Goulburn there are many intermediates; and 
it might well be disputed in what order five con- 
temporaries Bastiat, Mill, Cobden, Gladstone, 

xi 



xii INTRODUCTION 

and List should be ranked by the discriminating 
historian of political economy. If Adam Smith 
illustrates very well the superiority that is usually 
assigned to the life of philosophic study and dis- 
covery, Friedrich List may equally be cited by 
those who regard an active participation in public 
affairs not only as necessary to happiness, but as 
a positive aid and stimulus to political genius. 
Both views may be true. Probably there are such 
differences and distinctions among minds of the 
highest order that in the very same temperature, 
soil, and environment, which bring one plant to 
perfection, another will wither and decay. The 
sauntering or sedentary life of a private tutor, a 
university professor, and a customs official suited 
Adam Smith and gave him twenty years of 
golden leisure in which to revolve, and ultimately 
to revolutionize, economic thought and commercial 
policy. But such a life would never have satis- 
fied Friedrich List. What is one man's food is 
another man's poison. 

For reasons which, if not obvious, are dis- 
coverable. List though hisjnfliipnpp O n commercial 



policy and perhaps even on public finance in 
general, may almost rival that of Adam Smith- 
is comparatively neglected in the universities of 
Europe and America. He may perhaps be de- 
scribed as the Cobbett of Tariff Reform. Reading 
List for Cobbett and Adam Smith for Paine, a 






INTRODUCTION xiii 

i -due may be tempted to adapt a famous passage 
in one of Hazlitt's sketches. List, with vast industry, 
an active imagination and lively pen, never seems 
to build upon a perfectly scientific foundation or 
to complete any of the work to our full satisfac- 
tion, whereas Smith seems to clear every problem 
that he chooses to handle from all controversy 
past, present, and to come. List provokes us to 
criticism. Smith reduces us to silent consent. 
Smith takes a bird's-eye view of things, though 
when occasion requires he can make good use 
of the microscope. List is always eyeing current 
controversies, fighting on one side or the other 
with the acrimony of a party journalist. The 
muse of history is his slave rather than his 
teacher. Like Cobbett, he sticks close to whatever 
business he has in hand, inspects its component 
parts, and " keeps fast hold of the smallest advan- 
tages they afford him." Perhaps, too, we may say 
that he is a pleasanter writer ; or at least, that the 
task of reading him is lighter; for he appeals 
freely to our natural prejudices and combative 
instincts, is more desultory, less consistent; and 
seems to be urged upon his path rather by an 
urgent opportunism than by the logical necessities 
of a wide comprehensive and scientific argument. 
Hazlitt says of Cobbett : " He is therefore tolerated 
by all parties, though he has made himself by turns 
obnoxious to all, and even those he abuses read 



X iv INTRODUCTION 

him. The Reformers read him when he was a 
Tory; the Tories read him now that he is a 
Reformer. He must, I think, however, be caviare 
to the Whigs." 

Similarly almost every type of economist can 
find something to abuse and something to praise 
in Friedrich List. He must, I think, be caviare to 
Mr. Balfour. An industrial Protectionist loves 
him as a protector of manufacturers, if a rural 
Protectionist loathes him for refusing protection to 
agriculture. An English Tariff Reformer is pleased 
with his denunciations of Adam Smith ; American 
and German Tariff Reformers enjoy explaining that 
if List were now alive, he would consider a policy 
of free trade to be no less wise for the United 
States or Germany now, than it was in his opinion 
for England in the forties. Not that List's 
political career, or his economic opinions, present 
the almost ludicrous changes and conversions of 
Cobbett It is rather that the groundwork of 
argument on which List had to found one part 
of his brief, was difficult to reconcile with what 
was required for the other part. When he was 
growing up to manhood, and began to throw 
himself into politics, Germany was divided into 
a great number of states, some large like Austria 
and Prussia, some of moderate size like Saxony, 
Bavaria, and Wiirttemberg, others mere petty 
principalities or dukedoms or free towns, but all 



INTRODUCTION xv 

claiming and exercising the right to surround 
themselves with customs houses and to tax 
one another's products and manufactures. It 
was against this paralyzing system of commercial 
IcucT that List directed his first energies as an 
pnmpHMppr In talent, courage, 
and public spirit he was not inferior to Cobden. 
Constantly distracted, as Cobden was also, by 
pecuniary anxieties, and exiled, as Cobden happily 
not, from his own home by the tyranny of 
a reactionary Government, he had to live somehow 
by his own exertions, and by the ceaseless activity 
of his wits and his pen. If he was at heart a 
German patriot, his greater Germany embraced 
not only Austria, but in moments of expansion 
the Low Countries and even Denmark. And he 
was a cosmopolitan, a citizen of the world. At 
one time he seemed likely to settle in England. 
At another he almost became a Frenchman. The 
first draft of his principal w work was written in 
French. With a little more encouragement at 
Washington he might probably have remained in 
America to inscribe another distinguished name 
on the great roll of American citizens. In modern 
Germany or modern America, he might have made 
a great fortune in some financial house ; for his 
versatile and enterprising mind had a natural 
bent toward the flotation of financial schemes. 
He might have been, in fact, a prince of company 



XVI 



INTRODUCTION 






promoters, but he lived a little before his time. 
His ideas were always too large for his age; 
and instead of laying up wealth, he laid up 
fame. He did not leave a fortune, but he left a 
reputation. 

Yet List, considering the extraordinary interest 
that attaches to his writings as well as to his 
dramatic career, has been strangely neglected. To 
the Free Trader he is a type of reactionary, though 
he was one of the founders of a parent frpfr 
trade movement a movement for the consolida^ 
lion of Germanv.which eventi 
customs houses anjl^more-obslacles to trade than 
hacT been ^wept away even by the political whirl- 
winds of the American and French Revolutions.. 
i3y the modern bureaucrats and official professors 
of his native land he is remembered as a rebel 
against their own class, a rash and dangerous 
champion of free speech, a believer in democratic 
institutions, and a Tariff Reformer whose doctrines 
would be altogether subversive of the so-called 
" scientific " tariff of modern Germany. If List had 
had his way there would have been free trade 
from Rotterdam to Memel, and from Memel to 
Trieste. This great territory he would indeed 
have surrounded by a temporary tariff for the 
purpose of protecting manufactures (but not agri- 
culture) until its "infant" industries were able to 
resist the competition of their stronger rivals in 






INTRODUCTION xvii 

Kngland. When the time came, and the industries 
reached the stage at which they could export and 
compete successfully in neutral countries, the pro- 
iriff would be removed, and the consumers 
who had been taxed during this period of pro- 
n in order that the productive capacity of the 
na f ion might be nursed into life and vigour would 
be relieved of their burdens and allowed to enjoy 
the blessings, not only of cheap food (of which List 
would never have deprived them), but of cheap 
clothing and boots and tools, and of all the other 
conveniences of life. This idea of the tariff as a 
nursery grew upon List during his stay in America. 
Had he lived another half-century to see the 
American tariff on worsteds and woollens raised 
higher and higher until the natural cost of warm 
clothing was doubled for the whole American 
people, he might have begun to question the 
working value of his theory. Instead of tariffs 
falling as industries grow, colonial, American, and 
European experience tells us that the reverse is 
usually the case. 

The economic contradictions of List are the 
natural consequence of the part he played as con- 
troversialist and propagandist. As controversialist 
he was eager at all costs to differ from Adam 
Smith. As propagandist he thought that the manu- 
facturers with whom he worked could be induced 
to concede internal free trade for the sake of an 



JCVIII 



INTRODUCTION 



enlarged home market only if they were guaranteed 
against French and English competition. The true 
answer to this theory is that free trade, by keeping 
the cost of production at the lowest point, gives 
all the industries which suit a country best, the < 
best chance of success. Moreover, if an industry 
anywhere is likely to pay, capital will be found ;/ 
and capital flows most readily to countries wher 
living is cheap and cost of production low./7 
protective tariff is, on the whole, an obstacle to \ 
investment Money naturally flows to the places 
where its purchasing power is highest Nor can 
vigorous industries be swamped by the removal 
of protection ; for the imports from abroad have 
to be paid for by those things which are most 
cheaply produced at home. Every reduction of 
a tariff increases the purchasing power of 
home cnnsnmpr and reduces the 



cos 



-lion And every increase of imports has to be 
paid for by a corresponding increase of exports. 
It must often have occurred to List that if free 
trade between Prussia, Saxony, Holland, and 
Austria were beneficial, as he stoutly maintained 
it would be, free trade with Switzerland, Den- 
mark, France, and England must also be beneficial. 
In the case of France, he could answer with some 
appearance of reason that free trade is of no 
use unless it is mutual and reciprocal. We often 
hear now that "one-sided" free trade is a great 



INTRODUCTION 



xix 



But when List wrote his principal book, 
England was already throwing open its ports, so 
uu he had to fall back upon the infant industries 
rgurnent, an argument that was equally applicable 
i o the case of a Bavarian or Swabian manufacturer, 
vho stood to be ruined by some more powerful 
|5axon or Bohemian competitor. 

Probably, his real reason for desiring a moderate 



protective tariff for a greater Germany was, an j 

that this, together with internal free trade and a 

[nationaTirystem oTTailways and a national post, 

vuniilH hplp tr> rnngnlifjatf fV|f rarp, kvpry piltrilUN' 

^ -* ^^^"^^^^ 

lerman felt at that time the need for unification. 
Without political unification Germany would 
remain what it had been for centuries, weak, poor, 
and distracted, the seat of domestic jealousies and 
civil war, an easy prey to the greed and ambition 
of foreign potentates. If the promise of a protec- 
tive tariff would help the states of Germany to sink 
their differences, pull down their customs houses 
and coalesce, a German economist might easily be 
induced to acquiesce in a moderate measure of 
temporary protection. List himself sometimes 
opened out a larger view, as when he said: "If 
the whole globe were united by a union like the 
twenty-four states of North America, free trade 
would be quite as natural and beneficial as it is 
now in the union." 

The poet Heine, whose friendship List enjoyed 



\\ 



INTRODUCTION 



during his three years' residence in Paris, revisit( 
Germany in the autumn of 1843, and celebrated the 
journey in a masterpiece of imaginative satin 
There is one incident in the piece that may have 
been suggested by his talks with List. At 
rate, it serves to give us a glimpse of Germany 
in the making. Heine had come to the Prussian 
frontier 

" Said a fellow-passenger of mine : 

The Fatherland goes better ; 
See, there is the Prussian Zollverein, 
The mighty Douanenkette. 

" The Zollverein's encircling band 

Will fasten our people together, 
And save our distracted Fatherland 
From all political weather. 

" It gives us an outward visible ark, 

A bond materialistic ; 
The inward grace is the censor's mark, 
The union idealistic. 

" The censorship makes of our national life 

A single unanimous whole, 
NVe need a Germany free from strife, 
United in tariff and soul." 

It is not too much to say that most of the ideas 
which underlie modern tariffs, both in the old 
world and in the new, were originated or formu- 
lated by List ; and whatever may be our individual 



INTRODUCTION xxi 

r ipinions of commercial policy or of the functions 
tariff, we may agree that no satisfactory view 
it" the subject can be gained without some study of 
areer and writings. Hitherto, American and 
English readers have had no adequate memoir of 
ife, though the " National System " was trans- 
hated by Samson S. Lloyd in 1885, and republished 
I; n 1904 with an introduction by Professor Nichol- 
;on. It is, perhaps, to be regretted that List's 
heories have been so little discussed by English- 
nen. Among foreign critics Rabbeno, in his 
'American Commercial Policy," devotes a chapter 
to our author, and summarizes the "Outlines of 
American Political Economy." 

These remarkable Outlines are now for the first 
time republished with some other (translated) 
(pieces which lend important aid to the interpre- 
tation of List's ideas and aims. My sister's 
1 researches in the List Archiv at Reutlingen have 
enriched this biography, and the new material 
(particularly that which relates to List's stay in 
[the United States) will, I hope, more than justify 
her labours. - To form a right opinion about tariffs 
is one of the chief functions of a sound education 
in political economy. In the heat of fiscal con- 
troversy no text-book can be more useful than one 
which, alike by its virtues and defects, stimulates 
the mind to further reasoning and research. If 
List's arguments are sometimes inconsistent, if 



XXII 



INTRODUCTION 



his logic is sometimes defective, if some of hi: 
forecasts have proved wrong, if some of his his 
torical illustrations are false, so much the mor< 
reason for studying with a fresh, active, am 
critical intelligence the life and writings of one 
whose influence has moulded for more than hal 
a century the commercial policy of two out of the 
three greatest industrial nations of the world. 



F. W. H. 



London, 1909. 




in 

by 



LIFE OF FRIEDRICH LIST 



CHAPTER I 

WURTTEMBERG, 1789-1825 

RIEDRICH LIST was born at Reutlingen in WUrt- 
temberg on August 6, 1789. The little town lies 
in the pleasant valley of the Echaz overshadowed 

the green slopes of Achalm, an outlying spur * 
of the Swabian Alb, whose range of volcanic 
limestone runs across the state from east to west. 
Two of its peaks, Hohenstaufen and Hohenzollern, 
are famous in history as the cradles of those 
Imperial Houses whose rival claims divided and 
distracted mediaeval Germany. Reutlingen itself, 
with its fine thirteenth-century church, ancient 
houses, and remnants of massive wall and tower, 
is still quaint and interesting ; in former days, 
small though it was, it played a gallant part in 
German history. 

A free imperial city, it remained loyal to the 
house of Hohenstaufen, and withstood an attack 
from their enemies in May, 1247. A hundred 
years later it entered the confederacy of Swabian 



2 LIFE OF FRIEDRICH LIST 

towns, formed to resist the encroachments of the 
WQrttemberg rulers. Uhland has immortalized 
the Fight on Achalm in which the forces of Ulrich, 
Duke Eberhard's son, were routed. Under the! 
favour of the Emperor Maximilian I. (whose statue 
adorns the fountain in the market-square) the 
town received many privileges, and when in 1519! 
another Duke Ulrich carried it by storm, it was 
freed again by its allies of the Swabian Bund. 
The novelist and poet Hermann Kurz (himself a 
Reutlinger) has given a picturesque description of 
the primitive simplicity and good fellowship of 
the townspeople at the end of the eighteenth 
century. Then the circuit of the walls still stood, 
the gates were shut each evening, and the unwary 
traveller who entered by night plunged with his 
horse into the swift tributary from the Echaz which 
occupied the middle of the main street. 1 Even the 
bitter fact that in 1802 (when List was twelve 
years old) Napoleon, as he coloured the map of 
Europe at his pleasure, handed over the gallant 
little town to Wtlrttemberg, could not make its 
children forget their proud memories. In this free 
atmosphere Friedrich List passed his earliest years. 
His father, a prosperous tanner, held muni- 
cipal office first in the old free city, and then under 
the WQrttemberg regime. Our hero, Georg 
Friedrich, the second son and youngest child of a 
1 " Schillers Heimath-Jahre," by Hermann Kurz. 



WURTTEMBERG, 1789-1825 3 

je family, was educated at the "Latin School," 
rhich, notwithstanding its title, was unable to 
lake him a good classic. His chief talent lay in 
writing of German essays, and in these he 
towed the first promise of that lively and nervous 
tyle which was to gain him so many readers in 
iter years. At the age of fourteen he entered 
lis father's tannery, where he was put under the 
charge of his elder brother. But the young 
Friedrich found tanning a distasteful trade. Why, 
he asked, should it not be carried on by machinery, 
the power for which could easily be supplied from 
the river close at hand? At every opportunity 
he played truant, escaping to the garden and 
devouring tales of travel under a shady tree, or to 
a pond where he had made an old trough into a 
clumsy boat. His evil example infected the other 
workmen and apprentices, and in despair his 
father and brother were converted to his own 
view, that his vocation was not the tanning of 
hides. What his vocation was did not seem so 
clear ; but at last his family decided the point, and 
at seventeen years of age, as a "Schreiber," or 
clerk, he entered the ranks of the Wurttemberg 
bureaucracy. First a learner in Blaubeuren, then, 
after passing his Assistant's examination, Taxes 
and Warehouses Commissioner in Schelkingen 
near Ulm, he came in his twenty-third year to a 
post at Tubingen. Here he took occasion to 



4 LIFE OF FRIEDRICH LIST 

improve his education by attendance at University 
lectures and by wide reading. At this time 
Schlayer, afterwards a reform Minister in the 
WOrttemberg Government, was a student at the 
University. With him, and in a lesser degree 
with his teacher the jurist Malbranc, List formed 
an intimacy which was perhaps more profitable 
than lectures. Schlayer and Malbranc had rooms 
opposite one another in two of the picturesque old 
many-storied houses whose gables overhang the 
steep and narrow streets of Tubingen. Here it 
was their favourite pleasure of an evening to 
discuss knotty points of law through their open 
windows. If worsted in the dispute Malbranc 
would shut his window with an ironical compli- 
ment to "his Excellency the future Minister of 
Justice." Of List he thought less favourably. 
"He wanders at will and reads as he likes that 
dreamer Montesquieu, Abraham Smith, John 
Adam Say, or even the mad Schanschak (Jean 
Jacques) and such empty-headed folk. Actually 
he said the other day that the German Michel, 1 
with his Roman code of law, seemed to him like 
a meagre boy who is dressed for Confirmation in 
his fat old grandfather's wedding coat. Yes, List 
is a good-for-nothing, and he will never be a 
lawyer." The Professor's acquaintance with even 

1 The typical German peasant, corresponding to John Bull or 
Brother Jonathan.* 




WURTTEMBERG, 1789-1825 5 

names of writers outside his own sphere of 
rk was evidently hazy, but there is no reason 
r or doubting this account of List's studies. 

In an autobiographical passage List relates how 
once in answer to a question from a teacher he 
asserted that Rousseau had not evolved the theory 
of the Social Contract from his own brain, but 
deduced it from the constitutions of the German 
imperial cities, or perhaps from his own town of 
Geneva, where the annual day of oath-taking was 
simply the renewal of a social contract for the 
course of the coming year. He adds an interesting 
refutation of- the charges of revolutionary ideas 
made against himself; saying that he always took 
existing facts as the basis of his proposed reforms, 
and that on the summit of his ideal commonwealth 
stood a King or an Emperor. He wished Germany 
to adopt those institutions to which England owed 
her strength and greatness, without the blots by 
which they were marred in England. 

At the moment, however, it seemed probable 
that List would disappoint Malbranc's gloomy 
prophecy. A successful examination raised him 
to a higher grade of clerkship, and he obtained a 
post in the Chancery department The reformer 
Wangenheim, 1 then Minister, found a kindred 

1 Born at Gotha in 1773. He was curator of Tubingen Univer- 

iiich may have brought him into contact with List. In 1816 

King Fricdrich of Wiirttemberg died, and was succeeded by his son 

Wilhclm. The change of rulers gave a temporary impetus to reform. 



6 LIFE OF FRIEDRICH LIST 

spirit in the eager young official; he was made 
Secretary to the Ministry in the Local Govern- 
ment Department, and in 1816 Chief Examiner 
of Accounts and a member of the Court of 
Audit 

List the elder had died in 1813. The sub- 
sequent loss of mother and brother incensed 
Friedrich against the existing system of adminis- 
tration. In 1815 his mother had been publicly 
insulted by an overbearing official for some trivial 
breach of regulations committed by one of her 
household. His brutal words about her "him- 
mels-sakramentischen reichsstadtischen Hochmut " 
wounded her deeply, and she died within a few 
weeks. List's brother, wishing to marry, sought 
exemption from conscription. He was harried to 
and fro between Reutlingen and Stuttgart in search 
of a document needed for some petty formality. 
On one of these rides his horse stumbled ; he was 
thrown, and received fatal injuries. Friedrich felt 
the blow keenly, and could never speak of his 
brother's end without fierce indignation. In 1816 
he was appointed to act as Secretary for a Com- 
mission to inquire into the complaints against the 
bureaucracy and to make proposals for reform, 
and annoyed his senior colleagues by presuming 
to insert some of his own ideas and suggestions 
in the report In 1817 it was his duty to inquire 
into the case of seven hundred inhabitants of the 



WURTTEMBERG, 1789-1825 7 

lower Neckar valley, whom the weight of taxes 
and the oppression of officials had driven to plan 
a combined emigration to America. Perhaps the 
remembrance of this experience may have influenced 
him in his own later difficulties, but its immediate 
ct was to increase his zeal in the furtherance 
of Wangenheim's reforms. His first piece of 
literary work appeared in the " Wdrttembergisches 
Archiv " l at this time an essay on Local Govern- 
ment with the motto, "Let the village and the / 
town learn self-government under the guidance of 
the ruler." Wangenheim was anxious that civil 
servants should have some opportunity of instruc- 
tion in the theoretical principles of government. 
With this aim he founded a Chair of Administration 
and Politics (Staatspraxis und Staatswissenschaft) 
at TQbingen, and appointed as first Professor List, 
who had already supported the idea in a Memorial. 2 
The pamphlet depicts in vivid colours the retro- 
grade state of the administration, and throws light 
on the subjects that were already occupying List's 
thoughts. " No one in our University," he says, 
" has any conception of a national economy. No 
one teaches the science of agriculture, forestry, 
mining, industry, or trade." Again, "the legis- 
lature, in regard to administration and finance, is 

Wiirttembergisches Archiv," Band II. Heft 2. 
Hausser II., Gesamraelte Schriften, pp. 1-14. " Gutachten 
ubcr die Erricbtuog einer StaatswirthscUaftlichen Fakultat." 1817. 



I 



LIFE OF FRIEDRICH LIST 






so entirely unscientific, the forms of government 
are in such a truly barbarous state, that if an 
official of the seventeenth century rose again 
from the dead he could at once take up his old 
work, though he would assuredly be astonished 
to find the advances that had been made 
during the interval in the simplest processes of 
manufacture." 

As an example of the financial chaos, List points 
out that the estimates were made for ten years 
in advance and could only be revised at the end 
of that period. The young Professor, with all his 
talent, was scarcely ready for the post, as he him- 
self admitted in later years. He threw himself, 
however, with characteristic energy into his duties, 
publishing an interesting little introduction or 
syllabus to his lectures under the title, "The 
Theory and Practice of Administration in Wiirt- 
temberg." 1 In it he defended the new and 
unpopular suggestion that bureaucrats needed 
theoretic training. "The question whether it 
is better to introduce civil servants to public 
administration through a course of teaching or by 
actual experience of affairs, seems to me just like 
the question : do we learn about a country from 

1 " Die Staatskunde und Staatspraxis Wurttembergs in Grundriss 
nir nahcrcn Bezcichnung seines Lehrfaches und als Leitfaden fur 
cine ZuhOrer : entworfen von F. List ordentlichen Professor der 
SuaUwirthschaft und in besondere der Staatspraxis auf der hohen 
Schulc zu Tubingen, 1818," 



WURTTEMBERG, 1789-1825 9 

a map or by travelling? ... He who really 
wishes to know a land can only enter upon 
a journey with profit if he has studied the map 
" (Preface.) 

The growing importance of corporations is 
emphasized. " Up to the present the slight atten- 
tion paid to the nature of corporations or guild- 
organizations has been a great gap in political 
theory, for through them alone can true freedom 
and order be preserved. A great indivisible state 
without any organization is a French chimera, 
either an aberration of liberty or an attempt to 
introduce an Eastern despotism according to the 
proverb Divide et impera " (p. 31). 

The appendix is noteworthy, in view of List's 
later writings, for some sentences directed against 
cosmopolitan theories. " The idea that the whole 
world can be joined in a union of citizenship is 
wholly unnatural. For the wars of independent 
nations are just as much outbreaks of primitive 
human nature as are the combats of individuals." 
A quarter of a century later, in the introduction 
to the National System, he described such a union 
as the " highest imaginable." 

His lectures were frankly propagandist, sup- 
porting Wangenheim's reforms and panegyrizing 
the modern constitutional state in contrast with 
more antiquated forms of government. With the 
same end in view he and some like-minded friends 






\ 



io LIFE OF FRIEDRICH LIST 

founded a paper, the Volksfreund aus Schwaben, 
which advocated important political reforms- 
genuine representative government, ministerial 
responsibility, local self-government, trial by jury, 
and freedom of the Press. In the preface to the 
Stoatskitnde he had already eulogized the Press. 
"Thoughts are free of duty, and since the Press 
began no human power can keep them outside 
its boundaries, either by a military cordon or a 
Great Wall of China." The paper at first was 
under official favour, but after Wangenheim's fall 
it was suppressed, and its founders all, at different 
periods, visited the fortress of Asperg as political 
prisoners. " In the Volksfreund" wrote List later, 
" I made my first attempt to humanize the official 
aristocracy, to attack the conservative idealists 
(Altrechtler), and to spread correct ideas of the 
nature of constitutional monarchy." The early 
pages of his " Preface to the National System " tell 
how in this year of journalism and teaching his 
first doubts regarding the universal validity of 
Free Trade, and his first conception of a differ- 
ence between cosmopolitan and national political 
economy arose ; how, too, he came to realize that 
the true commercial interest of Germany lay in 
the abolition of the various state tariffs and the 
formation of a national customs union. Some 
attributed the fall of the Volksfreund to the 
influence of Metternich ; but the first modest 






WURTTEMBERG, 1789-1825 n 

reform proposals of Wangenheim met with a 
storm of opposition within Wdrttemberg itself, 
and at the end of 1817 he was forced to resign. 

n List and his lectures fell under suspicion ; 
and in May, 1818, he addressed a memorial in his 
own defence to the King. A guarded answer was 
returned, pointing out that young men were too 
apt to translate innocent speculation into rash 

ion, and that it was List's duty: o watch against 
this danger. At the same time the new reactionary 
Ministry made secret inquiries from the Senate 
of the University about the character of List's 
lectures. He heard of this by chance, and 
naturally asked what report his colleagues had 
made, but his curiosity was rebuked as "extremely 
strange." In the Easter holidays of 1819, however, 
his activity was diverted into new and more con- 
genial channels. (See note, p. 28.) 

During the first thirty years of the nineteenth 
century Germany was just beginning to realize 
the causes of her economic and political poverty. 
Never was a great country most obviously intended 
for unity so hopelessly weakened and divided by 
artificial barriers. There was a multitude of 
states ; and every state, nay almost every sub- 
division of each state, had its special tax-system. 
Each town was cut off by customs duties from 
neighbouring towns and from the surrounding 
countryside. Prussia alone could show within 






12 LIFE OF FRIEDRICH LIST 

its boundaries sixty-seven different tariffs, levied 
according to districts, some on persons, and some 
on goods. No fewer than 2775 articles were liable 
to taxation, and the dues were collected by an 
army of eight thousand officials. As a foreign 
observer 1 remarked, the Germans were prisoners 
who could only hold intercourse with one another 
through iron bars. 

On the other hand, there were few external 
taxes. The Napoleonic Wars had almost stopped 
foreign trade; the Berlin Decrees while ruining 
many industries had forced some into life, and in 
the intervals of battle landowners and manu- 
facturers had enjoyed such prosperity as accrues 
from a season of artificially inflated prices. But 
after Waterloo this accidental protection dis- 
appeared, and English goods especially found a 
ready market. Their superior quality and cheap- 
ness (owing to the recent marvellous advance in 
mechanical production) made them dangerous rivals 
to home manufacturers, hampered as the latter 
V were by their makers' prejudice against new inven- 
tions and by the network of internal tariffs which 
prevented the development of a home market. 
At the same time Germany's natural exchange 
to England agricultural produce was largely 
blocked by the English Corn Law of 1815, which 
amounted to practical prohibition. Bavaria (1807), 
1 De Pradt. 



\\ IJRTTEMBERG, 1789-1825 13 

WOrttcmberg (1808), and Baden (1812), had already 
tried to improve their home trade by the removal 
of all taxes to the boundary, but their action had 
less influence than Prussia's. That state took the ' 
first step towards reform in 1818. Free intercourse 
> established within the country, and all customs 
duties were transferred to the boundary. Prussian 
le at once improved, but the step only aggra- 
d the difficulties of other states, and especially 
of her numerous small neighbours. For twenty- 
eight states lay along her 1073 miles of boundary. 
List had already been struck by the idea of a 
commercial union between the German states, 
and had pressed it in letters to the Freiherr von 
Cotta, the Stuttgart publisher, and other influential 
men. Now, in April, 1819, on a holiday journey 
to Gottingen fie visited Frankfurt-on-Main at the 
time of Easter Fair, when the town was thronged 
with merchants and manufacturers from all parts 
of Germany. A petition to the Federal Diet for 
the promotion of trade and industry, was on foot 
among them, and largely through List's influence 
it took the form of proposals to abolish internal 
customs, to include the whole of Germany within 
a single customs boundary, and to establish a 
system of retaliation against foreign tariffs. The 
idea of common action on behalf of German 
trade was not original. In 1816 at the Leipsic 
Fair, Ernst Weber, of Gera (one of List's chief 



14 LIFE OF FRIEDRICH LIST 

supporters at Frankfurt), had urged a meeting of 
traders and manufacturers to draw up a memorial 
and to rouse the conscience of the Federal Diet 
over the question. List himself had small hope 
that the Diet, after two years of inaction, would 
take any practical steps, and trusted more to the 
traders' own efforts. 

During his professorship List had married 
Caroline Neidhart, daughter of Professor Saybold 
of Tubingen, a young and beautiful widow. 1 She 
was to prove a faithful comrade through all the 
years of changing fortune that lay before them, 
and he wrote to her now in the first flush of 
success (April 14). " I am head over ears in 
work ; I have founded a Union of German 
Merchants, and drawn up an address to the Diet 
advocating freedom of trade. About one thousand 
merchants will sign it to-day. The day after to- 
morrow it will be presented. This may have great 
results." The Handelsverein was not formally 
constituted till April 18, when at a meeting in 
the Goldoies Ross the " Union of Merchants and 
Manufacturers for the purpose of promoting 

1 She had by her first husband one son, Karl Neidhart, who 
became a physician and settled in America. He died in Phila- 
delphia in 1895. List's own children were Emilie, b. 1818, d. 1902 ; 
Okr, b. 1820, d. 1840 ; Elise, b. 1822, m. Herr Gustav Pacher von 
Theinburg of Vienna, d. 1891 ; and Caroline, b. 1829, still living 
in Munich, widow of Herr August Hovemeyer, the historical 
painter. 






WURTTEMBERG, 1789-1825 15 

German trade and industry " l came into being. 
The Committee consisted of members from the 
merchant bodies of the Rhine, Old Prussia, Bavaria, 
Saxony, WOrttemberg, Hesse-Meiningen, Hesse- 

nstadt, Nassau, and Baden. Invitations to 
join were sent to the trading communities of 
Hanover, Brunswick, Leipsic, and the Hanse 

ns. List himself was absent (on a journey 
along the Rhine to collect signatures for the 
memorial); but he was appointed Organizer or 
" Konsulent " of the society, and entrusted with 
the task of framing its constitution. At the end 
of April he formally notified the King of his 
action, and of the new work which he had 
undertaken. He considered it, he said, important 
and beneficial to Germany as a whole, and to his 
native state in particular. The Ministry replied 
that a public servant should not take up a post 
unconnected with his office, especially in a foreign 
("auswartig") state, without express permission 
from his superiors. List must give a full defence 
and explanation to the Ministry of the Interior. 
In answer to this he asked permission to resign, 
but was told that before this request could be 
granted he must make his defence. This he did 
with spirit in a document dated May 20. The 
Handelsverein, he argued, was not a public but a 

1 "Zutn Zweck dcr Befordcrung des dcutschen Handels und 
Gewerbes." 



i6 



LIFE OF FRIEDRICH LIST 






private association, and the post was not incom- 
patible with his Professorship. In fact, an attempt 
to invigorate the depressed industries of Germany 
was a task well suited to a Professor of Political 
Economy, and he had undertaken it from dis- 
interested motives, as the office was an honorary 
one. The statement that he had accepted a post 
in a "foreign" state completely ignored the 
existence of the German Federation. According 
to Federal Law, in all matters of common interest 
(and by the igth Article of the Act of Union trade 
and tariffs fell under this head) Germans were 
considered citizens of a single state. Was a 
WQrttemberger not also a German ? Had an 
official fewer rights than a private citizen? The 
latter could join such a union unhindered. An 
irresistible impulse had urged him to the relief of 
the oppressed, to a movement by which Govern- 
ments might learn under what burdens their citizens 
suffered. Personal enmity, he feared, was the true 
cause of the Ministry's action, but he assured the 
King that the most loyal and devoted subjects 
were those of a constitutional monarch. 

These outspoken remarks secured his dismissal, 
and he was free to follow the path he had chosen, 
and to work towards the union of Germany in a 
closer bond than any afforded by the Federation. 
"I need hardly say," he wrote later, "that my 
first thought in founding the Handelsverein was a 



WURTTEMBERG, 1789-1825 17 

political one. Though at that time the Prussians 
spoke so much about the historic growth of con- 
stitutions and regarded youthful hopes as folly, 
yet I wished to try whether a seed could not be 
planted out of which a constitution might grow." 
His whole time and strength were devoted to the 
work. The question of the Frankfurt memorial 
had been raised in the Federal Diet by von 
Martens, a deputy from Hanover; but the reply was 
not encouraging. The proposals, in the view of 
the Diet, were theoretically desirable, but it 
was difficult to unify the customs and abolish 
internal dues in a country consisting of different 
provinces. France had so found it in the eighteenth 
century ; and though the Revolution had accom- 
plished the task, such a price would be too costly 
for Germany to pay. Retaliation against foreign 
tariffs, though desirable, also involved many 
difficulties. The merchants must look for help to 
the state Governments. When it was clear that 
the Diet would take no action, a meeting of the 
Handelsverein at Nuremberg (July, 1819) decided 
to follow its advice, and send a deputation to the 
various German Courts. At the same time the 

:<in Industrial and Commercial Magazine 1 was 
founded, edited, and largely written by List. In 
its columns he advocated many reforms, some 
of which such as an Imperial Postal System and 

1 Organ /iir den dtutschtn Handels- ttnd Gewerbcstand. 




18 LIFE OF FRIEDRICH LIST 

an Imperial Patent Law were jiot accomplished 
until more than twenty years' after his dea 
"The deputation was well received at tTie~SoutIT 
German Courts, at Carlsruhe in particular, where 
Nebenius had already been working in the same 
field. In the autumn Weber and two companions 
went to Berlin. Maassen, the author of the 
Prussian financial reforms, was a strong Free 
Trader, and disapproved of the retaliatory part of 
the Handelsvereins proposals. But as his own 
tariff for revenue had not given satisfaction in 
Prussia, he told the delegates that he would 
gladly replace it by another, embracing if possible 
the whole of Germany. He promised to help 
forward their work to the best of his ability. In 
January, 1820, List, Schnell, and Weber proceeded 
to Vienna to press the matter on the Emperor 
and the Austrian Ministry. The Congress of 
Representatives from eight German Governments, 
whose meetings at Carlsruhe in the preceding 
year had been adjourned, was now reassembled 
in Vienna, List's every hour was crowded with 
activities memorials, petitions, and visits to 
leading statesmen. In an audience with the 
Emperor Francis on March 6, he explained his 
views and was heard with attention. But the 
Congress was engrossed in other business, and 
was incapable of entertaining this grand idea of a 
unified Germany. To a petition it returned the 



WURTTEMBERG, 1789-1825 19 

curt reply (May 22) that the matter had already 
been considered by the Diet, which had expressly 
ed to recognize the Union's claim to represent 
nan mercantile opinion. The Union itself 
found the far-reaching projects of its organizer 
somewhat overwhelming. A misunderstanding 
with Bauerreis the treasurer and a charge of 
financial maladministration drew an indignant 
il from List But his "castles in the air" 
plans for a pan-German industrial exhibition or 
for a society to export German manufactures 
frightened cautious men of business, not yet 
accustomed to think in terms of a greater Germany. 
In September, 1820, a Commercial Congress 
met at Darmstadt with representatives from all 
the South German States, Prussia, and Saxony. 
It was the first definite result of List's work, but 
another deputy was chosen by his own Union 
to attend it. Although he visited the Congress 
in his private capacity he soon withdrew. The 
movement, to which he had devoted so much 
energy, progressed too slowly to please his eager 
spirit. Yet his work had not been thrown away. 
Between the years 1820 and 1825 negotiations were 
carried on between the Governments of several 
South and Middle German states, the most impor- 
tant being a conference at Stuttgart in 1825, in 
which Bavaria, \Viirttemberg, Baden, Hesse Darm- 
stadt, and Nassau took part. Ultimately, in the 



20 LIFE OF FRIEDRICH LIST 

year 1828, two " Zollvereins " were formed, the one 
between WUrttemberg and Bavaria, the other 
between Prussia and Hesse. The formation of 
the Mid-German " Handelsverein " in the same 
year was due chiefly to the jealousy felt by the 
smaller states towards Prussia ; but this combina- 
tion had little vitality and soon went to pieces. 
The three Unions, however, by their very defici- 
encies prepared the way for transition to a wider 
system. In 1829 the Bavaria-Wurttemberg Union 
made a commercial treaty with Prussia and Hesse, 
which established practical free trade between the 
four states. List's friend and publisher, the Freiherr 
von Cotta, was an active worker in the cause of 
unification. Saxony was the chief obstacle to any 
further advance ; and for some time longer, on 
political grounds, it refused to enter into any 
treaty with Prussia. At last, on January i, 1834, 
a German Zollverein was formed between Prussia, 
Nassau, Wdrttemberg, Bavaria, Saxony, and the 
Thuringian states ; these were joined in the course 
of the next two years by Baden, Nassau, and the 
city of Frankfurt. "The elder generation," said a 
later writer, " can still remember how joyfully the 
opening hour of the year 1834 was welcomed by 
the trading world. Long trains of waggons stood 
on the high-roads, which till then had been cut 
up by tax barriers. At the stroke of midnight 
every turnpike was thrown open, and amid cheers 






WURTTEMBERG, 1789-1825 21 

e waggons hastened over the boundaries which 
cy could from thenceforward cross in perfect 
freedom. Every one felt that a great object had 
been attained." 1 

in these fourteen years List had gone through 
many vicissitudes. On retiring from his post of 
Consulent he plunged into the politics of his 
native state. The people of Reutlingen had suffered 
from the arbitrary action of Government officials, 
and List had several times advised them in their 
difficulties. On July 6, 1819, the town elected 
him its deputy to the representative assembly 
of Wtlrttemberg, but as he was just below the 
statutory age of thirty his election was disallowed. 
Shortly afterwards the district of Waldsee offered 
him a seat, and asked him to publish some state- 
ment of his political views for the benefit of the 
electors. List drew up a " Catechism," of twelve 
questions and answers, his main theme being a 
complaint against the heavy taxation from which 
WQrttemberg at that time suffered. The Ministry 
considered that such a publication was likely to 
foment popular discontent and disaffection, and 
List incurred official censure. At the end of 1820, 
after his resignation of the post in the Handels- 
verein, Reutlingen elected him for a second time. 

1 Gustav Fischer, " Ueber das Wcsen und Dedingungen eines 
Zollvcrcins." Hildebrand's " Jahrbiichern fur National Ockonomic 
und Statistik," Bd. II., S. 375. 



22 LIFE OF FRIEDRICH LIST 

The Ministry which commanded a majority in 
the Chamber was reactionary, and he naturally 
joined the Opposition. He took his seat on 
December 7, and characteristically began his 
parliamentary career by bringing forward three 
proposals in quick succession : first, that the 
Chamber should take steps to revive and sup- 
port the depressed industries of Wurttemberg ; 
second, that the Finance Committee should accom- 
modate the burden of taxes to the circumstances 
of the country ; and third, that the Upper House 
should meet every year, and that annual Budgets 
should be introduced. These suggestions met 
with little response in the brief time before the 
adjournment of the House. List spent the Christ- 
mas holidays in drawing up a petition on behalf 
of his Reutlingen constituents, which contained 
a damaging if somewhat overstrained indictment 
of the existing regime in Wurttemberg, with some 
bold proposals for financial, administrative, and 
judicial reform. The petition had just been litho- 
graphed when List's house (where he lay ill in 
bed) was entered by a police officer; the newly 
printed copies and the manuscript were seized, 
and the author put on his trial for sedition. When 
the Chamber re-assembled it became known that 
List was debarred from attending. This was the 
interpretation put by the Ministry on a paragraph 
in the royal rescript by which the constitution 






WURTTEMBERG, 1789-1825 23 

had been established. According to this clause, 
anv deputy against whom a criminal action was 
pending ipso facto lost his seat List and his 
friends protested against such a confusion between 
political and criminal offences. The Chamber 
appointed a Commission, among whose members 
was the poet Uhland, to inquire into the terms 
of the rescript Before their report appeared List 
had obtained permission to defend himself in the 
Chamber, which he did on February 17 in an 
able speech. The majority of the Commission 
reported that in its opinion the prohibition was 
only meant to apply to cases of gross non-political 
crime. But when the question, "Should List leave 
the Chamber? "was put to the full House it was 
carried by fifty-six to thirty-six votes. A supple- 
mentary question, whether he could re-enter the 
Chamber after the conclusion of his trial, was 
agreed to by the ministerial party, but opposed 
by his friends on high constitutional grounds. 

Meanwhile the process continued, with many 
petty casuistries and quibblings, for more than a 
year, at a ruinous cost to List and his household. 
On April 6, 1822, judgment was pronounced: ten 
months' imprisonment with hard labour in the 
fortress of Asperg, and payment of eleven-twelfths 
of the cost of the action. The sentence, as List 
complained in a memorial to the King, destroyed all 
civic rights. He determined to appeal against the 






24 LIFE OF FRIEDRICH LIST 

decision, and meanwhile to leave the country. On 
April 15, he reached Strasburg where he remained 
some months, pleased with the place and people, 
but harassed by " eternal want of pence ; " for his 
efforts to gain money by literary work met with 
small success. The difficulties of his wife and 
family, whom he had left behind in Stuttgart, 
were also a constant anxiety. In a letter to his 
friend Cotta he gives detailed reasons for his 
flight (May i, 1822) : 

"Had I any choice? Should I have allowed myself to 
be chained to a clerk's desk on Asperg amid the delight of 
all my enemies the Government clerks ? Even if as a private 
man for the sake of my family (whom this action has involved 
in difficulties) I might have borne such a disgrace, yet should 
I have been worthy ever again to come forward as an advocate 
of constitutional freedom ? I, who when it was possible to 
escape had surrendered myself to a judgment which insulted 
both the representative system and the dignity of a repre- 
sentative ? Now the die is cast . . . Should they drive me 
hence I will go to London, to Madrid, nay, I will go to 
America, in order to escape this outbreak of passion and to 
vindicate myself before the world." 

List was soon to receive a more definite impulse 
towards America. In the mean time, as pressure 
had been put upon the Strasburg authorities by 
the WUrttemberg Government, he took refuge in 
Baden, where his family joined him. But at the 
end of December he heard that the Court of 
Appeal at Esslingen had upheld the decision 



WURTTEMBERG, 1789-1825 25 

against him, and at the same time the Baden 
Ministry showed that his presence in the country 
not desired. A visit to Paris early in 1823 
brought him into contact with Lafayette, from 
whom he received much kindness. The General 
was planning a visit to the United States in 1824 
as the "guest of the nation," and invited List to 
go with him. But his friends dissuaded him from 
so momentous a step, and instead he crossed the 
Channel to England in the hope of establishing 
a journalistic connection in London. There is 
curiously little record remaining of this visit 
Hausser barely mentions the fact There is a 
passing allusion by List (in a speech at Phila- 
delphia) to kindness shown him by Richard Rush, 
then American Ambassador in London. But he 
certainly travelled in several parts of the country, 
for he more than once makes the statement that 
he first became acquainted with railways in Eng- 
land, and at that time rail traction was only 
employed at a few of the mines of the North 
and Midlands. Again, in a letter written two years 
later from Metz he describes the place as "more 
regularly built than any old town I have seen 
in Germany, France, or England." l He was not 
to revisit the country until a few months before 
his tragic end. 

1 See preface to the " National System," p. 12, and "Nord und 
Sud," Band III., 1877, p. 71. List's letter is dated April 18, 1825. 



26 LIFE OF FRIEDRICH LIST 

Disappointed in his hopes of work in England, 
List turned to Switzerland, visiting Basle, Aarau, 
and other towns. At this time he published a 
petition to the King of Wiirttemberg and a 
voluminous account of the proceedings at his trial 
in a number of Themis, 1 a political periodical 
which he had set on foot. Wolfgang Menzel, the 
critic and historian, in his " Reminiscences " has 
given an account of an expedition to Fluelen, 
which illustrates List's vehement and fiery 
character. "As we crossed the lake, List told 
us his experience and burst into a storm of curses 
against the Wilrttemberg ' scribblers.' As he 
stood up in his anger with outstretched fist, 
gnashing his teeth and shouting, 'Those wretched 
clerks!' ('O Schreiber! Schreiber!') he made 
the boat rock, stumbled, and would have been 
drowned had we not seized him. He was the 
most impetuous man I have ever met ; still young, 

1 Themis^ tine Sammlung von Staatswissenschaftlichen 
Abhandlungen Ubersetzungen^ und in die Politik einschlagenden 
RcchtsfdlUn. Zweiten Bandchen. " Friedrich Lists, Mitglieds der 
Wurttembergischen Deputirter-Kammer ehrfurchtsvolle Denk- 
schrift an Seine Majestat den Konig von Wiirttemberg, einen von 
den koniglichen Gerichtshofen an seiner Person und an der Ver- 
fiuMtng des Landes begangenen Justitzmord betreflfend ; oder 
Aktenmassiger Beweis der Verwerflichkeit des heimlichen Kanzlei- 
Inquisitions-Gcrichts und der Unentbehrlichkeit des Geschwornen- 
Gtrickts und der Gerichtsbfftntlichkcit in konstitutionellen Staaten. 
Jacta est Alea. Gcdriickt in Strasburg. In Kommission des Gcrs- 
nerischen Buchhandlung in Zurich, 1823." Its first number had con- 
sisted of a translation of Aighan's " History of the Jury System." 



WURTTEMBERG, 1789-1825 27 

but already corpulent Any one who had once 
seen him, would assuredly always remember him, 
for his short squat body was crowned by a dis- 
proportionately large and lion-like head. His eyes 
sparkled, thunder played round his fine brow, and 
his mouth was as fiery as the crater of Vesuvius." 

List had hoped to make Basle his home, but 
he got embroiled with the town authorities and 
was sentenced to twenty-four hours' imprisonment 
upon a diet of bread and water. A medical friend 
lightened the punishment by sending him the 
useful " prescription " of a sausage and bottle of 
wine. After this experience the wanderer returned 
to Aarau. His customary optimism led him to 
suppose that the official resentment against him 
in Wdrttemberg had by this time evaporated. 
According to his biographer, Hausser, friends 
encouraged him in this opinion. Menzel, on the 
contrary, declares that they strongly dissuaded 
him from return. It is certain, at least, that he 
despatched a letter to the King begging for the 
revocation of his sentence, and without waiting 
to hear the result returned in May, 1824, with his 
family to Stuttgart. He was at once arrested 
and despatched to Asperg. The "literary hard 
labour" consisted of monotonous copyist work for 
the governor of the fort, lists of soldiers' accoutre- 
ments, descriptions of foreign arsenals, and the 
like. A report on the state of the French artillery 



28 



LIFE OF FRIEDRICH LIST 



evoked this ejaculation in his diary: "We pay 
great attention to the arts of destruction as prac- 
tised in foreign lands. If only we gave the same 
heed to the condition of their laws and industry ! " 
From the few records which remain of this 
period, it seems that List was released for a short 
time under police supervision, and then again 
imprisoned, but on what pretext does not appear. 
From his letters it is plain that he hoped for a 
final release in December, 1824, after which he 
might spend some time in preparations for 
deparature. For he had at last decided to accept 
Lafayette's invitation and to sail for America in 
the following April. But it was not until January, 
1825, that he was brought from Aspergto Stuttgart. 
There he was told that a passport would be given 
to him, and that he must leave the country in three 
days. He went to Alsace, only to find that he was 
not allowed to settle either there or in Paris. Re- 
turning to the right bank of the Rhine, he waited 
with impatience until his family could join him. 

NOTE. Robert von Mohl, who was a student at Tubingen during 
List's professorship, gives an account of the difficulties that beset 
List in his academic life (" Lebenserrinerungen," pp. 93, 94). In his 
Latin inaugural address he perpetrated some false quantities, and 
this mishap combined with his inexperience as a lecturer to lose 
him the confidence of the students, while his colleagues regarded 
him with suspicion as an upstart favourite of Wangenheim. Fulda, 
indeed, the Dean of the Faculty of Politics, made secret com- 
plaints against him to the Government. The matter is fully dis- 
cussed in Dr. Ktthler's recent book, " Problematisches zu Friedrich 
List,' pp. 51-55. 



CHAPTER II 

AMERICA, I825-I83O 

A LETTER from Lafayette (dated Richmond, Vir- 
ginia, January 22, 1825, and received by List in the 
following March) urged him to come to the new 
world, .adding stories of other German fugitives 
who had found successful careers awaiting them. 
List's own letters to his wife show that (as ever) 
his hopes rose high. "When Madame M. speaks 
of the^dearness of living in America, she judges 
merely from what she saw in her own surroundings. 
Living in America is costly and luxurious, but in 
America it is also cheap and simple. The 
Americans are knavish, cheating, avaricious folk 
but the Americans are also generous, high-spirited, 
and hospitable. This is as much as to say that 
America is a large country, that there are a great 
many Americans, that men and districts differ 
from one another yonder even more than with us, 
since America is ten times the size of Germany." 
(Rastatt, March 14.) A chance meeting with a 
Sontheim innkeeper, lately returned from America, 
increased his eagerness. 

29 



30 LIFE OF FRIEDRICH LIST 

" The fellow has suffered from fever for six months, and 
scarcely spoke unless spoken to. But when I mentioned 
America his whole being became animated, and he commended 
our resolve. As you know, he was there for six years, and 
only came back to look after his, property, but during his visit 
home he married, and then could not induce his wife to 
return with him. Now he is homesick for North America 
twelve months of every year, and whenever any one begins to 
speak with him on the subject his dragon of a wife (otherwise 
a worthy woman) becomes quite venomous in the fear that, 
though she is very well off, he may some day slip away from 
her. I consulted him especially about the accusations which 
various people have brought against the country, and he 
declared that they were all infamous lies. The people are 
good, industrious, honest, and kindly. He had, he said, 
travelled in the States for at least twelve months, and the 
country folk who entertained him as a guest at their well- 
spread tables, had never asked or accepted the smallest sum 
from him. More than once they had wished to provide him 
with capital to establish himself in business purely out of 
friendship. Respectable people can find help and friends 
everywhere, but the land is so flooded with European 
adventurers that people wait to find out what manner of man 
you are before they trust you far. We shall, he was con- 
vinced, find ten times more culture and pleasant qualities 
among the middle class there than in Europe, and for a 
German life is far pleasanter in Pennsylvania than in Alsace. 
Customs, language, character, kindliness they are all as in 
Germany. As to the value of freedom, no one can judge of it 
(his very words) no one can judge of it unless they have lived 
there. In a word, the man has heartened me so much that I 
consider everything that has happened to us for a real piece of 
good fortune. Madame Rosch bustled about impatiently 
during our conversation, and as we were leaving she accom- 
panied us out of the house. There she said to me, ' I am 



AMERICA, 1825-1830 31 

not angry with you for talking about America to my husband 
ts you are going there yourself. I am only afraid, if you talk 
much more to him, that he will slip out of my hands.' We 
bughed heartily." l 

After meeting with many petty annoyances 
from the WUrttemberg Government the family of 
List joined him, and they left Germany on April 15, 
1825. 

" At break of day," wrote List to a friend, " we 
started, encumbered with luggage in true emigrant 
fashion and at a funereal pace, as if we feared 
to reach the German boundary too soon. We 
elders sat in gloomy meditation : to-day we must 
leave Germany and so much that is dear and 
precious to us. Ah ! we must leave it, perhaps for 
ever, and cross the wide ocean ; perhaps we shall 
see one of our darlings buried in the waves, 
perhaps we shall die apart from them with the 
bitter anxiety of leaving them alone in a strange 
land. So we sat, each with his own sorrow, 
no one dared to look up for fear of betraying his 
thoughts to the other. Then the children began 
the song 

' Auf, auf, ihr Briidcr und scid stark ; 
Wie ziehen iiber Land und Meer nach Nordamerika.' 

We could restrain our grief no longer. My dear 
wife was the first to regain her composure. ' You 

1 Quoted by Roschcr, "Zur Erinnerung des Friedrich List" 
ord und Sud," Band I II., 1877). 



32 LIFE OF FRIEDRICH LIST 

have nothing with which to reproach yourself, you 
have acted like a man ; we are not leaving because 
of our ill deeds. In God's Name, let us compose 
ourselves. He has watched over us, He will guard 
us. Now, children, we will sing with you ! ' 

"It was one of the most beautiful spring 
mornings I have ever seen. The sun was just 
spreading its first beams over the lovely meadows 
of the Pfalz country, and the sight poured healing 
balm into our sore hearts. Soon we were singing 
merrily every one of Schiller's songs that we could 
recollect, and finally Uhland's jesting 

" ' So hab' ich denn die Stadt verlassen.' 

The people who met us must have taken us for 
the family of some Bavarian official, who had been 
transferred to a higher post, rather than for a band 
of exiled emigrants." 

After two days' rest in Paris they reached 
Havre on April 21, sailing thence on the 26th. 1 
List's letters during the journey give a lively 
description both of the country through which 
they passed, and the inconveniences of travelling 
by diligence eighty years ago. It is amusing to 
find the man, who three years later became one 
of the earliest advocates of railways, now almost 

1 From the papers at Reutlingen it appears that the boat was 
the Harry (Captain Kemp), belonging to the firm Larne and Palmer, 
and that the cost of the voyage for the whole family (himself, his 
wife, and four children) was 2300 francs. 






AMERICA, 1825-1830 33 

awestruck by the speed of a "caravan" of ten 
diligences conveying about one hundred and fifty 
ngers from Paris to Havre. 1 The sight of a 
prosperous manufacturing town in Normandy 
(Bolbec) called forth some characteristic comments. 
" When will the sight of such manufacturing 
>rosperity bring the obstinate worshippers of 
idam Smith into the right road ? However much 
lis teacher of national economy may have been 
of service to the world from other points of view, 
all his services cannot compensate for the incalcu- 
lable mischief which he has caused by instilling 
the dream of so-called 'free intercourse* into the 
minds of some of our theorists. Smith's initial 
error is in attributing a productive power to 
capital ; whereas labour alone, with the help of a 
greater or less amount of capital, is productive. 
Of course I have already opposed this theory in 
my earlier writings for the Handelsverein, but the 
subject demands a special study in order to over- 
throw the special arguments of the founder of the 
school. 

" I hope that the United States will afford me 
a fine example in proof of my assertion. They 
followed Smith's theories till their whole industry 
lay in ruins, and then began to follow the system 
which the theorists abhor. We shall see how they 
fare under it. In truth, I am beginning to believe 

1 Roschcr, ** Nord und Sud," p. 71. 

D 



34 LIFE OF FRIEDRICH LIST 

myself that I am undertaking a literary journey 
to the United States." (His passport declared 
that his journey was for purposes of research.) 

The boat entered New York harbour on June 10, 
and List immediately went to Philadelphia. There 
he met with a cordial reception from Lafayette, 
who invited him to be his companion during his 
triumphant journey through the States. List thus 
had the privilege of being introduced under the 
best auspices to many leading politicians, amongst 
them Henry Clay, and of seeing American life 
under the most favourable circumstances. He was 
present at the famous Fourth of July celebration 
on Bunker's Hill, and recorded some impressions 
in his note-book. " The soldiers marched without 
stiffness, but in good order, and with the bear- 
ing of free men who do not fear the rod. In 
monarchical states the public festivals revolve 
round the monarch; here the festival is general, 
happiness and rejoicing beam on every face. It 
all reminds me of my own free imperial city this 
public rejoicing of young and old, the thunder of 
cannons, platoon-firing, flags, and processions. . . . 
As far as elegance is concerned, I do not know 
whether I could give the preference to this com- 
pany of statesmen over the levee of some great 
monarch, but I am certain that in this assembly 
there is a greater movement of profitable ideas, 
a greater display of honourable sentiments than 



AMERICA, 1825-1830 35 

icre is among all the royal levees in the world, 
do not see here those hungry faces and loafing 
jurcs which are in the majority at any European 
val." Later, he expressed his general opinion 
of the nation: "Anything new is quickly intro- 
duced here, and all the latest inventions. There 
is no clinging to old ways, the moment an American 
hears the word ' invention ' he pricks up his ears. 
All matters concerning the people as a whole, 
public order, legislation, holidays, newspapers, and 
so forth, are excellently managed, and the ex- 
perience must broaden the mind of any European. 
But if he penetrates into their private life he finds 
it dull, monotonous, and stiff." This drawback 
List put down to democracy, because in a monarchy 
the aristocrat's rank is assured, and he need not 
always consider his dignity; in America a man's 
superiority is not taken for granted, hence he 
feels he must continually assert it by his behaviour. 
These months of travel, though full of interest, 
had not brought him any means of livelihood. In 
the autumn of 1825 he began to look in earnest 
for the "little property" the haven of rest to 
which his thoughts had turned during the last 
few troubled years. In his search he visited 
Pittsburg, Harmony, and Economy. This last- 
named town was the most successful of the com- 
munistic settlements founded by the WOrttemberg 
Secretary Ra'pp, where he and his followers lived 



36 LIFE OF FRIEDRICH LIST 

in expectation of the speedy second coming of 
Christ. Another less fortunate settlement New 
Harmony was bought by Robert Owen in 1824, 
but only met with another failure under his 
guidance. The German atmosphere naturally 
appealed to our exile "The vesper bell rings 
there as in my Swabian home," but for some 
reason he did not settle there. A little farm 
ten acres of land and a house was purchased in 
the neighbourhood of Harrisburg, and the family 
moved thither from Philadelphia in November, 
1825. The enterprise, as might have been fore- 
told, proved unsuccessful ; List had much zeal, 
but little practical knowledge of farming, and 
came off badly in his dealings with shrewder 
neighbours. The situation of the house was damp, 
and the health of all the family suffered. In a 
few months' time, after a vain attempt to dispose 
of his purchase, he was forced to leave it un- 
occupied and take up a less speculative, if not 
very remunerative employment the editorship of 
Der Adler, a German-American paper in the little 
town of Reading. List himself declared later (in the 
introduction to the " National System " *) that this 
episode had been of great educational value. During 
his exile from Wttrttemberg, he said, he had read 
widely in Economics, History, and kindred sub- 
jects ; but " when Fate led me to America I left 
1 " National System," edited by Eheberg, pp, 10, 1 1. 






AMERICA, 1825-1830 37 



all books behind me ; * they would only have led 
me astray. The best book on political economy 
which one can read in that country is life itself." 

" Here before one's eyes wildernesses become rich and 
powerful states. Here it first became clear to me that nations 
pass through different stages of economic development A 
process, which in Europe would require many centuries, takes 
place here under our very eyes I mean the transition from a 
state of nature to pastoral cultivation, from that to agriculture, 
and from that to manufacture and commerce. ''> Here we can 
observe how rgnt gradually grows from zero to an important 
;i. 1 Here a simple farmer by practical experience has a 
better understanding of the means by which agriculture and 
rent can be advanced than the keenest intellects of the old 
world he tries to attract manufacturers and artificers into the 
vicinity. Here the contrast between agricultural and manu- 
f.irturing nations shows itself in the clearest manner and causes 
the most violent agitations. Nowhere so well as here, can we 
learn the true value of means of transport and their influence 
on the intellectual and material life of the people. I read this 
hook with eagerness and industry, and sought to bring the 
lessons I learned from it into harmony with my former studies, 
experiences, and reflections." 

For the first twenty years of their history as 
a separate nation the inhabitants of the United 
States were almost exclusively engaged in agri- 
culture. The immediate necessities of life, tools, 
shoes, homespun cloth, and so forth, were indeed 
made in each locality, either by members of the 

1 This is not literally correct. Several lists of books in his 
handwriting, made during these years, survive, and show that 
especially in English his reading was wide. 



38 LIFE OF FRIEDRICH LIST 

farmer's household, or by independent artisans and 
craftsmen. But the American colonies had been 
compelled to import the chief varieties of manu- 
factured goods from England, and though the 
force of coercion had been removed, economic 
necessity led the young republic to continue in 
the same path. Alexander Hamilton in 1792, when 
Secretary to the Treasury, had presented to Con- 
gress his famous Report on Manufactures, in 
which he advocated temporary protection as a 
measure of self-defence against the high tariff 
systems of Europe, and gave a forcible and lucid 
exposition of the two main arguments of later 
Protectionists the importance of developing a 
home market, and the claim of " infant " industries 
to support and shelter. Yet, although the pre- 
amble to the first Tariff Act, in 1787, stated that 
among its objects were " the protection and 
encouragement of manufactures," the rates of the 
early tariffs were quite moderate. Many were, 
no doubt, protective in intention, but they only 
averaged from 5 per cent, to 15 per cent, ad 
valorem. 1 

The Embargo Act of 1808, the Non-Intercourse 
Act of the following year, and the subsequent 
war with England, by destroying for the time all 

1 Cp. Taussig, "Tariff History of the United States," pp. 15, 16, 
and Harrowcr, "Alexander Hamilton als National Oekonom," pp. 
46-50. 



AMERICA, 1825-1830 39 

imerce with Europe, forced American manu- 
ictures into activity and afforded them for a 
time complete protection of the results. One 
example may suffice ; the estimated number of 
spindles in cotton mills rose from 8,000 in 1808 
to 31,000 in 1809, and 130,000 in iSis. 1 The close 
of the Napoleonic Wars and the treaty of peace 
between England and the United States in 1815 
removed this protection ; English manufacturers 
hastened to avail themselves of the new markets 
thrown open to them, and America began again 
to exchange her raw materials for cheap English 
goods. Prices fell * Consumers were relieved. 
Farmers benefited, n But a demand for protection 
arose among the industries which had sprung up 
during the years of non-intercourse and now were 
endangered by the tide of foreign competition. 
As a result, the tariff of 1816 was considerably 
higher than any preceding one, though part of the 
increase was explained by the necessity of meeting 
the heavy interest on the war debt. In 1819 land 
speculation and a disordered currency brought on 
a severe crisis ; the prices of land and agricultural 
products fell rapidly, while good harvests in 
Europe and the effect of the Corn Laws in England 
had cut off the foreign demand for American 
grains. Meanwhile the manufacturers having tasted 

1 Taussig, op. cit^ pp. 16, 17, 27-29. See also James, "Studien 
iiber den amerikanischen Zolltariff," pp. 9-15. 



40 LIFE OF FRIEDRICH LIST 

prohibition were not content with a moderate 
measure of protection, and became more and more 
persistent in demanding more tariff support for 
their infant industries. The agricultural interests 
were less organized, and while some of the farmers 
arc said to have been won over by promises of 
a larger home market for their own products, 
more were bought by promises of protection. In 
1820 a bill for a general increase of duties passed 
Congress, and was rejected in the Senate by one 
vote only. 1 The debates on this measure show 
both the strength of the protective movement and 
its local character. A Its stronghold was in "the 
Middle and Western States of those days in 
New York, New Jersey, Pennsylvania, Ohio, and 
Kentucky." 1 The New England states, interested 
in shipping and importing, were on the whole 
strongly opposed to the movement, with the 
natural exception of the cotton and woollen manu- 
facturers, already an important body. The South 
had supported the bill of 1816; but in 1820 its 
opposition was vehement and was continued during 
the ensuing ten years. "They had grasped the 
fact that slavery made the growth of manufactures 
in the South impossible, that manufactured goods 
must be bought in Europe or in the North, and 
that, wherever bought, a protective tariff would 
tend to make them dearer." * 

1 Taussig, op. a'/., p. 71. - Ibid. p. 73. 



AMERICA, 1825-1830 41 

The Tariff of 1824 was distinctly protective, 
lough its duties were chiefly levied on articles 
produced by the Middle and Western States 
(iron, wool, hemp, etc). The duties on cotton 
and woollen goods were also increased, but in 
the case of the latter this advantage was offset 
to the manufacturer by an increased duty on raw 
wool, which was imposed to gratify the sheep 
farmers. The English duty on imported wool 
was reduced this year from is. per pound to \d. t 
thus enabling Yorkshire manufacturers to sell more 
cheaply and adding to the difficulties of American 
makers. Various efforts were made in the follow- 
ing years to gain increased protection for the 
American woollen industry, but in 1827 these 
particularist efforts were merged in a wider pro- 
tectionist movement. Since 1819 the country had 
been deluged with petitions and pamphlets on the 
question, one of the most active agents on behalf 
of Protection being the " Pennsylvania Society for 
the Promotion of Manufactures and the Mechanic 
Arts," which had been founded (as the " Phila- 
delphia Society for the Promotion of National 
Industry") by Alexander Hamilton. Its President 
at this time was Matthew Carey, an Irish refugee, 
the founder of an important Philadelphia publish- 
ing house, with a branch at Boston managed 
by his more famous son Henry C. Carey. 
Carey the elder was a prolific anti-English and 



42 LIFE OF FRIEDRICH LIST 

Protectionist pamphleteer; his colleague, the vice- 
president of the society, Charles Jared Ingersoll, 
was also a strong Protectionist and a leading 
citizen of Philadelphia. These two politicians 
and the society which they led took a very 
prominent part in the agitation, and apparently 
originated the suggestion that a " national conven- 
tion " of Protectionists should be called to bring 
forward proposals for the new tariff. The idea 
became popular in the various protectionist states ; 
meetings were held to appoint delegates, and the 
Convention was summoned for July 30, 1827, at 
Harrisburg, the capital of Pennsylvania. 

Ingersoll had made the acquaintance of List 
during the latter's visit to Philadelphia, and was 
so much impressed by his ability that he begged 
him, not only to attend the Harrisburg Convention, 
but also to prepare the ground by drafting a 
popular pamphlet in support of Protection and 
in confutation of Cooper, a Free Trader and in- 
dividualist, as well as a writer of repute and 
author of a leading American text-book of political 
economy. List wished to bury Cooper in German, 
but Ingersoll persuaded him to make a more super- 
ficial attack in English. The author's own account 
of the matter is given in the Preface to his " National 
System." 1 "When in the year 1827 the American 

1 Pp. xi and xii Eheberg's edition. It is odd that List twice 
gives Ingersoll the title of President of the society. 



AMERICA, 1825-1830 43 

manufacturers were hard pressed over the tariff 
ion by the adherents of Free Trade, Mr. 
Ingersoll urged me to enter into the controversy. 
I did so with some success ; the twelve letters in 
which I expounded my system not only appeared 
in the Philadelphia National Journal, but were also 
reprinted in more than fifty provincial papers, and, 
under the title, " Outlines of a New System of 
Political Economy," were published as a special 
pamphlet by the Society for the Promotion of 
Manufactures, so that many thousand copies were 
disseminated. Besides this, I was congratulated 
by the most distinguished men of the country, 
for instance the venerable James Madison, Henry 
Clay, Edward Livingstone, and others." 

The Convention met on the day when List's 
concluding letter was written. 1 It consisted mainly 
of wool-growers and manufacturers ; but other 
interests iron, glass, hemp, and flax were also 
represented. Resolutions demanding high pro- 
tection for manufacturers and producers were 
passed, and were embodied in an address to Con- 
gress. List himself delivered a lecture to the 
delegates in the Representative Hall, which is 
referred to in terms of praise by Ingersoll in a 
private letter. Some report of it has survived 
in an unfriendly speech by a Free Trade member 
of Congress. 2 A letter from Richard Rush, 
1 July 30, 1827. * Vide post ) p. 51. 



44 LIFE OF FRIEDRICH LIST 

Secretary to the Treasury, who had formerly 
been American Ambassador in London, and in 
that capacity (probably at Lafayette's request) had 
shown List some kindness in 1823, has been pre- 
served at Reutlingen. Rush courteously acknow- 
ledges the gift of List's pamphlet, adding that he 
had already been interested by some of the letters 
when they had appeared in the Press. Their 
arguments may have influenced his annual Report 
to Congress, for he took up the question of Pro- 
tection, and "claimed that, as the land laws of 
the country protected agriculture, at least a like 
amount of protection should be given to industr}'." 1 
So great was the success of the pamphlet that 
the Pennsylvania Society entertained List to a 
complimentary dinner in recognition of his ser- 
vices to the cause. It was held at the Mansion 
House, Philadelphia, on November 3, 1827. A 
printed account of it survives, as a preface to List's 
speech,* which shows that it was an occasion 
of some political importance. According to the 
fashion of the day, there is a portentous list of 
set toasts or "sentiments," some of which are 
interesting as tokens of the popular feeling. One 
coupled " the memory of Alexander Hamilton and 

1 Lalor Cyclopaedia of Political Science, art. " Tariffs." 
* Account of the dinner given to Professor List by the Pennsyl- 
vania Society for the Encouragement of Manufactures and the 
Mechanic Arts, at the Mansion House, Philadelphia, November 
3, 1827. 



AMERICA, 1825-1830 45 

success of Richard Rush in perfecting their 
is of national industry." Matthew Carey, avoid- 
giMinmatical pitfalls, made a great hit by his 
;t of " Henry Clay, the able and successful 
,-ocate of the protection of that portion of 
icrican industry which furnishes 'a domestic 
larket, the best of all markets/ according to the 
sound doctrine of Adam Smith, 'for the rude pro- 
duce of the soil.'" This skilful quotation was 
greeted with " rapturous applause." List himself 
the health of " Philadelphia and her Society 
for promoting Manufactures. This metropolis, not 
enjoying the commercial supremacy of her great 
sister city, will take hold of the banner of internal 
industry, and this patriotic society will inspire the 
whole Union with its praiseworthy zeal." Part 
ol the speech proposing this toast a remarkable 
piece of eloquence for a man speaking in an alien 
tongue is included in the present volume. 

The eighteen set toasts were followed by eighteen 
more " volunteers " or impromptu sentiments, 
among which some wit produced the following 
scintillation. " May this society be never List-less 
of their true interests." The perpetration of a 
pun so appalling throws some doubt over the 
reporter's statement that " the company adjourned 
at an early hour, impressed with the most 
pleasant sensations, after a day spent in moderate, 
but cordial festivity." But the society showed its 



4 6 LIFE OF FRIEDRICH LIST 

appreciation of its new helper in more practical 
fashion ; for the Committee, at a meeting on 
November 21, 1827, passed the following series 
of resolutions : 

"Whereas it has appeared to the society that great and 
important interests of the United States have suffered and are 
suffering much, for want of a sufficient dissemination of the true 
principles of Political Economy, and whereas the enemies to 
the American system are ceaseless in their exertions to cause 
to be republished and disseminated in large numbers the 
inapposite maxims of Smith, Say, and other writers, which, 
however sound they may be as abstract principles in cosmo- 
politan ecqnomy, experience has fully proved them inapplicable 
to the present state of the commercial world. And whereas 
Professor Frederick List has proved himself a man of pro- 
found knowledge in the science of Political Economy, and 
has opened new 'and fundamental principles, clearing away 
the errors and removing the prejudices which have hitherto 
made a mystery of that science, and has thereby rendered it 
plain and comprehensible to every capacity ; and whereas this 
society are very desirous that Professor List should proceed 
forthwith to publish and disseminate his new and funda- 
mental views of that important science for the use of schools, 
and also in a full and extended treatise. Therefore, Resolved 
that this society do earnestly call on Professor List to prepare 
and publish as soon as may be, an elementary work for the 
use of schools, and also an elaborate treatise on Political 
Economy adapted particularly to the situation in the United 
States. Resolved that this society do recommend the said 
Professor List to the members of the Congress of the United 
States, the legislature of the State of Pennsylvania and other 
legislative bodies, the several universities and public semi- 
naries of learning, and to their fellow-countrymen generally for 






AMERICA, 1825-1830 47 



r aid in enabling him to accomplish this desirable object. 

hvd that this society will subscribe for fifty copies of each 
and will do all in their power, individually and collec- 
/, to procure subscribers, and in every way to aid Professor 

t in his laudable undertaking." 

An animated scries of letters from Ingersoll 
preserved among the Reutlingen papers shows that 
List was employed by the society to answer the 
host of pamphlets, memorials to Congress, and 
speeches published in opposition to the new tariff 
proposals. A fragment of a letter (not from 
Ingersoll, but possibly from Matthew Carey) 
addressed to List at this time says, " I am glad 
you are going to answer the Boston memorial. 
It is very able and will require a cool, profound, 
and deliberate answer." l 

List himself, in the " Mittheilungen aus Nord- 
amerika," 9 mentions the answer as one of his con- 
tributions to the tariff controversy, and it seems at 
all events probable that the pamphlet " Examina- 
tion of the Boston Report," published by the 
Pennsylvania Society and generally attributed to 
Matthew Carey, was in reality written by List. 3 

1 For the authorship of this letter, see p. 62. 

: '* Mittheilungen aus Nordamerika," p. 3. 

3 To the kindness of Professor Taussig of Harvard University, 
the following information is due : " The copy of the Examination 
of the (Boston) Report published in Philadelphia in 1828, which is 
in our University Library, is stated on the title-page to be ' by a 
Pennsylvania!).' A pencil memorandum on our copy has added 



48 LIFE OF FRIEDRICH LIST 

Another letter from Ingersoll shows that List 
had not yet given much study to the history oi 
economic theory. The Pennsylvania Society, says 
Ingersoll, was not in error when it mentioned 
France as the birthplace of the science of political 
economy and Scotland as the home of its disciple. 
The allusion was, not as List supposed, to Adam 
Smith and J. B. Say, but to Smith and Turgot ; the 
" Essay on the Formation of Wealth " having no 
doubt suggested to Smith " The Wealth of Nations." 
These letters reflect the variations of hope and 
anxiety felt by the Protectionists during the tortuous 
manoeuvrings in Congress over the bill of 1828. 
On April 16 of that year Redwood Fisher the 
secretary of the society informs List that " from 
present appearances it seems most probable that 
we shall get no tariff this session of Congress." 
The actual outcome of the agitation, however, 
was unexpected. The Convention had brought 
forward proposals for a general system of protec- 
tion to agricultural products and manufactures, 
and especially for new duties on wool and woollens. 
These latter were so heavy as to amount to practical 
prohibition. 1 By this time what may be called the 

' Matthew Carey.' I find also that Sabin's Dictionary- of Books 
relating to America, usually a safe guide, ascribes it to Matthew 
Carey. Glancing through the pages, however, I confess it does 
not look like Carey's work, or at least as if it were all Carey's 
work." 

1 Taussig, op. cif., p. 83. 






AMERICA, 1825-1830 49 



crritorial " divisions over the tariff question 
re complicated and crossed by political divisions 
arising out of the coming presidential election. 
John Quincy Adams and his followers were on 
the whole Protectionist, while Andrew Jackson's 
supporters in the South were bitterly opposed to 
a high range of duties, and yet on most points 
were willing to work against the "Adams men" in 
conjunction with the Northern (and Protectionist) 
"Jackson men." These cross-currents were at 
play the whole session, and resulted in a piece of 
diplomacy so elaborate that it over-reached itself. 
The Tariff Bill was " to contain not only a high 
general range of duties, but duties especially high 
on those raw materials on which New England 
wanted the duties to be low. It was to satisfy the 
protective demands of the Western and Middle 
States, and at the same time to be obnoxious to 
the New England members. . . . When the final 
vote came, the Southern men were to turn around 
and vote against their own measure. The New 
England men and the Adams men in general would 
be unable to swallow it, and would also vote 
against it. Combined they would prevent its 
passage . . . and yet the Jackson men would be 
able to parade as the true 'friends of domestic 
industry. 1 " l This ingenious scheme failed, since 
tear of the coming election induced a certain 

1 Taussig, op. '/., p. 83. 



5 o LIFE OF FRIEDRICH LIST 

number of New England members (including 
Daniel Webster, the Free Trade orator of 1824) to 
vote for the bill, and it passed both House and 
Senate by small majorities, becoming the famous 
" Tariff of Abominations." The circumstances of 
its passage gave point to John Randolph's pungent 
sarcasm that "the bill referred to manufactures 
of no sort or kind except the manufacture of a 
President of the United States." l 

The debates upon the bill in the House of 
Representatives abound in allusions to the Harris- 
burg Convention, its "first inception," 2 to Matthew 
Carey, Hezekiah Niles, and other leading Protec- 
tionists. List himself is referred to on at least two 
occasions. McDuffie of South Carolina (of course 
an opponent of the tariff), after reading a passage 
from the address to Congress presented by the 
Harrisburg Convention, ridiculed its style. "The 
Harrisburg Convention stands much more in need 
of a Professor of Rhetoric than they do of a 
Professor of Political Economy. . . . The writer 
of this address, who is a mere instrument in the 
hands of designing men, understands nothing of 
the political and economic bearing of American 
System." 8 Whether List was the author of this 
address or not, McDuffie apparently attributed it 

1 "Congressional Debates," vol. iv. p. 2471, 
1 Ibid. p. 2435. 
8 Ibid. p. 2391. 



AMERICA, 1825-1830 51 

to him. We owe to this speaker also a more 
<it finite allusion to him, and the only existing 
quotation, as far as I can find, from his lecture 
at Harrisburg. There is, McDuffie tells us, "a 
:in German Professor of Political Economy 
and Necromancy, in Pennsylvania, who has recently 
introduced to the American public by a 
member of the Harrisburg Convention. And I 
must do him the justice to say, that no one could 
have been selected of more eminent qualifications 
to lecture from the text of the Harrisburg Address. 
I quote from a lecture of Professor List, delivered 
in the Representative Hall of Pennsylvania 

" ' If this country would succeed in raising in the course of 
time its manufacturing industry like France, then the property 
(land) of Pennsylvania would increase from 7 to 66 dollars per 
acre, or from 210 to 2046 millions, which would be an increase 
of 1836 millions. This sum would bring an interest, at 6 per 
cent., of no millions, and the interest of the interest would 
make 6\ millions ; which is certainly more than we consume, 
at this moment, of foreign merchandise. To buy cheap 
manufactures is, consequently, not the primary interest of the 
farmer, but to increase the value of their produce, and, above 
all, the value of their lands. It is not, therefore, well done if 
they buy cheap goods, as the merchants say ; on the contrary, 
the cheaper the worse, if they cannot exchange the produce of 
their land. I venture to say, the worst of all things would be, 
if they could get their goods for nothing ! because the English 
would in that case indemnify the Americans only for the 
interest of the interest of that sum which they would give if 
they would make them themselves.' " 



52 LIFE OF FRIEDRICH LIST 

McDuffie's comment is, "An addition of 1836 
millions made to the wealth of the nation by 
excluding 6 millions of foreign merchandise and 
paying a higher price for the domestic substitute ! 
This beats the celebrated scheme of British finance 
by which the National Debt was to be paid off 
without any taxes at all, by the mere mathematical 
power of compound interest . . . Professor List 
is no doubt a legitimate descendant of the Rosi- 
crucians who once figured in Germany; and I 
cannot but congratulate the Harrisburg Conven- 
tion in having supplied the desideratum which they 
so much lamented by a Professor of Political 
Economy who bids so fair to be the discoverer 
of the philosopher's stone." l The next day 
(April 19) his colleague Hamilton, carrying on 
the sarcasm, remarked that "we appear to have 
imported a professor from Germany, in absolute 
violation of the doctrines of the American System, 
to lecture upon its lessons to convince Adam 
Smith of stupidity and Ricardo of error." 8 

In the mean time (December 22, 1827), List, 
with his usual hopefulness, had published a large 
advertisement of his unwritten work on Political 
Economy, headed by the Resolutions of the 
Pennsylvania Society. The book was to be 
entitled, " The American Economist, by Frederick 

" Congressional Debates," vol. iv. p. 2394. 
1 Ibid. p. 2432. 



AMERICA, 1825-1830 53 

List, of Pennsylvania, formerly Professor of 
Political Economy, and Counsel of the General 
Society of German Manufacturers and Merchants 
for obtaining a German system of Political 
Economy," and its aim would be to render "that 
important science which the works of Adam Smith 
and John Baptist Say covered with mysteries, with 
confusion and contradiction . . . what it ought to 
be in every free country, truly and thoroughly 
popular and practical. The author will endeavour 
not only to impart all important truths laid down 
by the principal writers of the old school, or by 
great statesmen and ingenious writers of this 
country, but to reveal the errors and imperfec- 
tions of that system of which Napoleon said : If 
an empire were of granite it would be ground to dust 
by following its precepts" 

Protectionist sentiment was so strong that no 
doubt many subscribers could have been found 
for this frankly partisan work if the two volumes 
had ever been published as contemplated, in eight 
numbers at a total cost of five dollars. But no 
number ever appeared, and only the introductory 
chapter ever reached the printer. 1 In the autumn 

1 Preface to " National System," ed. Eheberg, p. xii. A 
fragment of four pages among the Reutlingen papers, entitled, 
" Chapter I. Survey of the History of Commerce and Commercial 
Supremacy," is no doubt a part of this introduction, which seems 
to have covered much the same ground as Chapters II. and IV. of 
t he " National System " (on " The Hansards " and " The English "). 



54 



LIFE OF FRIEDRICH LIST 



of 1830, when List was approaching President 
Jackson with a view to a mission in Europe, he 
sent to him a rough proof of this introduction, 
accompanied by an interesting letter. After speak- 
ing of "the many years' labour and reflection which 
I attempted to concentrate within the space of these 
eighty pages," he says 

" My principal aim was to show how and by what means 
England, from being as it were a colony of the Hanseates, 
grew up to be the first naval, commercial, and manufacturing 
Power of the globe, and thus to point out the tracks in which 
this country has to step, in order to arrive at the point of her 
great destination. ... In the second chapter I shall treat in 
a similar way the history of the science of political economy 
from De Witt and Stuart down to Malthus and McCulloch. . . . 
The aim of men as philosophers must be eternal peace. Their 
practical aim is to amass the greatest quantity of power and 
prosperity within their own nation. Eternal peace and freedom 
of trade throughout the world go hand in hand." 

The Pennsylvania Society entered heartily into the 
project, and its secretary employed an agent to 
collect subscribers in the neighbourhood, among the 
names forwarded to List being those of Ingersoll 
and Carey. But as time passed and no signs of 
the book were forthcoming, Ingersoll apparently 
lost patience, and his letters contain pointed in- 
quiries about its progress, to which List could give 
no satisfactory answer. His energies had been 
diverted (as he confesses in the Preface to the 






AMERICA, 1825-1830 55 

" National System ") to the pursuit of more personal 
and profitable interests. 

During an expedition into the mountains near 
his home he had discovered a rich coal-mine in 
the Little Schuylkill valley and bought it, together 
with a tract of the surrounding country. Anxious 
to introduce his coal to the widest and most 
profitable market, he turned his thoughts to the 
new means of transport railroads. A company 
with a capital of 700,000 dollars was formed under 
the name of the " Little Schuylkill Navigation 
Railroad and Canal Company," to develop the 
mine and to connect it by rail with the Schuylkill 
Canal at Port Clinton. In a later account of the 
enterprise, 1 List tells us that he had already 
become acquainted with railways on his brief visit 
to England in 1823. He goes on to say, however, 
that before his stay in America he had only under- 
stood the importance of means of transport as it 
can be learnt from the theory of value ; he had 
observed the effect of transport arrangements only 
in isolated cases and with regard to the extension 
of markets and lowering of prices. " Now, for the 
first time, I began to consider it from the stand- 
point of the theory of productive power and in 
its combined operation as a national transport 
system, consequently in its influence on the whole 
intellectual and political life, social intercourse, 
1 Introduction to " National System," p. xii. 



56 LIFE OF FRIEDRICH LIST 

productive power and material strength of the 
country." 

There is no doubt that List was one of the first 
to see what railways would do for industry and 
commerce. The " English [railways " [he mentions 
were mere horse tramways a few miles in length, 
though since 1809 Stephenson and others had been 
working at the development of iron roads and 
carnages drawn by locomotives. In May, 1823, 
the first rail of the Stockton to Darlington line 
was laid, but it is unlikely that List journeyed 
so far north when he visited England. The line 
from Liverpool to Manchester was opened on 
September 15, 1830. 

In America the adoption of railway transport 
was slow and hesitating. Here also the first lines, 
like List's own venture, were tramways for the 
transport of minerals or stone to some neighbouring 
canal or river. The Baltimore and Ohio, the first 
line of importance, was not begun till 1828 (the 
year of List's discovery), and its first section of 
14 miles was opened in 1830. Even in 1835 
Pennsylvania with 318 miles of railway possessed 
nearly one-third of the mileage in the United 
States. Unlike those in England, the American 
lines were built for the moment, not for futurity. 
"They were rude and unsubstantial structures 
involving a heavy outlay for repairs, and were 
very inadequate to the service even then required 



AMERICA, 1825-1830 57 

i hem. The superstructure of the lines first 
constructed was a longitudinal sill, the rail or 

tp of iron laid upon it serving to prevent the 
abrasion of wood rather than to support the train. 
The change from wood to iron was a very gradual 
one." 1 In the "Mittheilungen aus Nordamerika," 
as well as later in his pamphlet " Ueber ein 
sachsisches Eisenbahn-System " (1833), List re- 
. amends these wooden lines to German imita- 
tion. 9 He says in the former, "Where there is not 
much transport wooden rails are preferable to iron," 
and in the latter pamphlet he quotes the arguments 
of an American engineer in their favour. 

The Little Schuylkill Railroad from Tamaqua 
the site of the mine to Port Clinton was opened 
on November 18, 1831. List was not present, but 
at the celebratory dinner Dr. Hiester, the chief 
mover in the enterprise, spoke of him in enthusi- 
astic terms, remarking that he was now on his 
way home from Europe where he had at his own 
expense spent the last year for the purpose of 
introducing American coal, and a toast was drunk 
with enthusiasm. "Professor List. His exertions 
to introduce anthracite into the European markets 
deserve our thanks." 3 Dr. Hiester was apparently 

1 Encyclopaedia Americana, art. " Railroads." 

- " Mittheilungen aus Nordamerika," p. 41. " Ubcr ein sach- 

es Eisenbahn-System," pp. 59, 60. 

3 Sckuylkill Journal, December 3, 1831, from the "Pennsyl- 
vania Intelligences." 



$8 LIFE OF FRIEDRICH LIST 

the originator of the enterprise, though List says 
he himself founded the Little Schuylkill Railroad. 1 
He certainly threw himself into the project with 
enthusiasm, for among his papers are many copies 
of deeds, share allotments, and letters concerning 
the construction, and there is evidence that in this, 
as in other undertakings, he met with his full share 
of difficulties and misunderstandings. In another 
passage* he remarks that the Little Schuylkill 
Canal, from the mouth of the Little Schuylkill 
to the coal-mines, has been given up in favour 
of a railroad. Perhaps Dr. Hiester was already 
interested in the canal project, and List was chiefly 
responsible for the change of plan. But List said 
of himself with truth, " Germany and the return 
to Germany always lie in the background of my 
plans," and almost at the moment that the idea 
of a railway crossed his mind it assumed the 
proportion of a national movement. 

"In the midst of the wild Blue Mountain 
country I dreamt of a German railway system. 
It was evident to me that only through such 
means could the Commercial Union attain full 
efficiency. These thoughts made me unhappy in 
the midst of my good fortune. Of necessity the 
effect on the financial position and national 
economy of Germany must be all the greater, 

1 " Uber em sachsisches Eisenbahn-System," p. 18. 
1 "Mittheilungen aus Nordamerika," p. 38. 



> AMERICA, 1825-1830 59 

c more imperfect the means of transport had 
been before, in comparison with culture, numbers 
and industry of the nation." 1 Already in the 
.i- 1827 he had entered upon an animated 
: respondence with Josef von Baader, Chief 
Manager of Mines for the Bavarian Government, 
who was anxious to introduce railways in that 
.ite. In this correspondence (printed in the 
Allfr'jncinc Zeititng) and in a continuation of it sent 
to his friends Weber and Arnoldi and published 
under the title of " Mittheilungen aus Nord- 
amerika" 8 he drew freely upon his American 
experience for details of railway construction and 
railway statistics, and especially exerted all his 
influence in favour of railways as against canals. 
The union of the Danube and the Main by a 
canal was then under consideration, but List 
poured scorn on the project. " Union of the North 
i with the Black Sea has a fine sound, but when 
you look into the matter, there is nothing behind 
the phrase. The North Sea has long been united 
with the Black Sea by a great natural canal, which 
passes Gibraltar and Constantinople, and with 

1 llausscr, p. 165. 

littheilungen aus Nordamcrika von Fr. List. Heraus- 
ftgeben von Ernst Weber und E. W. Arnoldi. Erstes Heft. 

r Can.de und Eisenbahncn, 1829; und Nachtrag zum ersten 
Hcftc enthaltend cine weitere Entwickelung der Vortheile I. 
Eincs Eiscnbahnsystem$ in Innern Bayern. II. Eincr bayerischer- 
hanseatischen Eisenbahn, 1829. Hamburg : Hoffman und Comp. " 



6o 



LIFE OF FRIEDRICH LIST 



which a waterway passing many hundred miles 
along the Danube by mountains and through 
uncivilized lands, then through a troublesome 
seventy miles of canal, and finally through the 
hundred river tolls and royal privileges of the 
Main and the Rhine, can never compete." Baader 
agreed with this view, but the Canal (which had 
been begun centuries earlier by Charlemagne) was 
carried through, owing to the personal influence of 
King Ludwig. 

The Bavarian railways, in List's mind, were to 
be merely the prelude to a pan-German system ; in 
1833 he advocated a Saxon system to attain the 
same end. With fine imagination he paints the 
future of steam transport and the influence which 
the new invention would exercise on Germany's 
intercourse with neighbouring lands. The old 
trade routes to the East would be opened up, 
Venice and Hamburg would be brought near to 
one another, and the post from Calcutta to London 
would have to come through Germany, for the 
sea-voyage round the Cape could not compete 
with the railway route over the Continent. In 
this last prophecy List could not foresee that the 
Suez Canal would provide a shorter sea-route 
more serious as a competitor than the one by the 
Cape. 

List pays a tribute to the individual enterprise 
of the Americans. " If in the United States all had 



AMERICA, 1825-1830 61 

lo be done by the Government, not the tenth part 
of what actually is done could be accomplished, nor 
would it be half so well done as it is now. Most 
of what is accomplished here is done by those who 
eally interested in bringing it to pass." ' As 
to the effect of railways on population, " Why," he 
asks in the "Mittheilungen," "do the American 
towns grow so visibly, so inconceivably fast that 
often one can, after the lapse of a few months, 
scarcely recognize their suburbs ? Some time ago, 
when I visited Philadelphia after a six months' 
absence, I found whole new streets, nay whole 
new districts. The cause is the extraordinary 
increase of agricultural production, and the re- 
sulting demand for manufactured goods, promoted 
by the manifold means of communication both 
natural and artificial." * List's own enterprise was 
a striking example ; two small towns, Tamaqua 
and Port Clinton, sprang up on ground belonging 
to the company at each end of the proposed line, 
and when his family visited the district before their 
return to Europe in 1831, they found that several 
other villages had arisen. 8 List's financial interests 
in the mine and railway were enough to relieve 
him from pecuniary anxiety. He had before made 
some efforts to obtain an academic post, but 

1 H.iusser, p. 172. 

1 " Mittheilungen Nachtrag," p. 23. 

3 " liber ein sichsischcs Eisenbahn-systcm," p. 18 ; also 
, p. 164. 



62 LIFE OF FRIEDRICH LIST 

apparently in vain. The following letter among 
the Reutlingen papers has lost its signature, 
but the writer was probably Matthew Carey, 
President of the Pennsylvania Society, since Fisher 
and Ingersoll were respectively the Secretary and 
Vice-President. 

" Philadelphia, January 21, 1828. 

" Mr. Fisher has communicated to Mr. Ingersoll, and Mr. 
Ingersoll to me your letter of the i8th. I have conferred in 
it with Mr. Ingersoll. We cannot understand what you expect 
to do with a Professorship of Political Economy. If I am not 
mistaken the Franklin Institute may establish one, and appoint 
a Professor without the special authorization of the Legislature. 
But when that is done, who will pay the Professor? Will the 
Legislature found a salary ? I presume they will not. What 
then will be the object of memorializing ? " l 

Andrew Jackson obtained the Presidency in 
1830. List was a friend of his Secretary of State, 
Edward Livingstone, with whom he used to corre- 
spond on economic questions slavery, commerce 
and so forth. a Through his friendship he now 
hoped to obtain a diplomatic mission to the 
Continent Two chief inducements seem to have 
influenced him : one, his longing to return home, 
and especially to advocate a German railway system ; 
the other, his desire to promote his own interests 

1 This letter contains the allusion to the Boston Report, which 
has been dealt with on p. 43. 

1 Zollvereinsblatt, No. M, March 17, 1846. "Die Nordamcri- 
ktnische Sklavenfrage." 



AMERICA, 1825-1830 63 

and those of American trade by the introduction of 
anthracite coal to the European market. With 
object he not only addressed letters to Presi- 
dent Jackson and other leading men, but visited 
lington to press his claims in person, as is 
shown by the bill of the National Hotel, October 
18-23, which still exists among the Reutlingen 
papers. A letter to the President (October 21) 
sketches out a suggested course of action in the 
event of his appointment to a diplomatic mission 
in France. 

In general, he would continue to write on 
economic questions and in opposition to the 
English monopoly, and would be on the watch to 
notice and report to America any technical inven- 
tions and improvements in the new means of 
transport (railways and steamers). His special aim 
would be to improve the commercial intercourse 
between the United States and France, and pro- 
mote the importation of anthracite coal by the 
latter country ; to induce the French Government 
to take in hand a railway between Havre and 
Strasburg ; to advocate a system of railway com- 
munication between South Germany and the North 
Sea, in particular along the Weser; and finally to 
look after the better organization of German 
emigration to the United States. Hausser, List's 
first biographer, remarks that these proposals were 
characteristic of the man who always thought in 



64 LIFE OF FRIEDRICH LIST 

terms of the Universal. He used the modest 
proposal of developing a market for American coal 
as a foundation stone on which to build a series of 
towering projects, each of which would have 
required his whole energies. The United States 
Government probably was less hopeful about the 
results likely to be attained than List himself, but 
it accepted the offer of his services, arranging that 
after he had done what he could to carry out his 
plans in Paris he should proceed to the American 
Consulate in Hamburg. The patent was signed on 
November 8, 1830, List started immediately and 
landed on December 20, at Havre. It was a 
" new man " who returned to the old world, says 
Ilausser, "one to whom, after his experience of the 
political liberty and economic prosperity enjoyed 
by Americans and their eagerness to use natural 
forces and mechanical inventions, the bureaucratic 
and unenlightened Governments of the German 
states were peculiarly hateful. He regarded 
England's economic and political position with a 
mixture of admiration and envy, and set before 
himself as one of his main aims the support of 
German manufactures and their advancement to a 
point at which they would be independent of 
British supremacy." 1 

He proceeded at once to Paris to begin his 
work. During his stay there he heard that the 
1 Hausser, p. 179. 



AMERICA, 1825-1830 65 

United States Senate had refused to ratify his 
appointment to the Hamburg Consulate, apparently 
from a reluctance to displace Mr. Cuthbert, the 
holder of the post, who supported himself and some 
poor relations on the salary. List had already 
determined not to oust the unfortunate man, and 
a letter containing his resignation crossed with 
one from Van Buren informing him of the Senate's 
decision. In the event it proved that he could 
not in any case have held the post, for a pro- 
test (inspired, List suspected, from Wurttemberg) 
sent by the Hamburg Government to the 
Senate, on the ground that he was a " dangerous 
political fugitive." An attempt to obtain a revision 
of his trial and gain permission to settle in 
Wilrttemberg was discouraged by his friends there, 
and an official intimation was given that it would 
be well for him not to enter the country. As he 
wrote bitterly, "The return to Europe soon cures 
one of home-sickness." In spite of disappointment 
he worked actively in furtherance of his projects. 
Belgium had just established her independence, 
and he pointed out to Mr. Rives, the American 
Ambassador in Paris, how the new State provided 
a route for American trade from Antwerp to the 
Rhine, alternative to that from Havre. He also 
urged the idea upon leading Belgians whom he 
met in the French capital. Mr. Rives was so 
struck by List's arguments that he suggested 



66 



LIFE OF FRIEDRICH LIST 



Brussels as the place where his services would 
be most valuable to the United States Government. 
At the same time List was urgent in advocating 
a railway system for France, and published several 
articles in the Revue Encychpediquc under the title 
" Idees sur des reformes economiques, commer- 
cielles, et politiques, applicables a la France." In 
these he laid especial emphasis on the growing im- 
portance of railway communication, and on the 
advantages which would accrue from a more exten- 
sive trade between France and America. But the 
time immediately after the Revolution of July- 
was not propitious, and his views made little impres- 
sion on the ministry, the opposition, or the general 
public. The chief result of his stay in Paris was 
an amended expropriation law to facilitate the 
acquirement of land for public purposes. Perhaps, 
however, it was by List's influence that in 1832 
young Michel Chevalier was despatched by the 
Government to America to inquire into systems 
of communication there. In 1836 Chevalier 
published the results of his inquiry, under the 
same title as List's work, " Letters from North 
America." l 

At the end of October, 1831, List re-crossed 
the Atlantic to bring his family back to Europe, 

1 A visit to England was followed by another book, " Material 
Interests in France: Public Works, Roads, Canals, Railways" 






AMERICA, 1825-1830 67 



and returned with the promise of the United 
s Consulship in Leipsic. This post was 
practically unsalaried, but gave him the definite 
advantage of an assured position as an American 
citizen, and he thought rightly as it proved that 
the town was a good centre in which to start a 
movement for a national railway system. The 
ill-health of his wife, however, detained him in 
Hamburg for a year, during which he was untiring 
in his advocacy of railways, but found that the 
leading merchants looked on his proposals as mere 
wild speculations. 

In the summer of 1833 List removed to Leipsic, 
where for the next four years most of his energies 
were divided between his literary work for the 
ftaats-kxicon and his activities on behalf of a Saxon 
(or rather a German) railway system. 

Before describing these it will be convenient 
to give some extracts from his official communica- 
tions to America, which throw light on his political 
and economic opinions at this time. A thin folio 
volume in the Reutlingen Archiv contains copies 
of his official correspondence for the month of 
December, 1834. Probably other letters are pre- 
served at Washington, but these seemed to have 
been considered by List as of special importance. 
They are, of course, written in English, and the 
following quotations are literal. In a letter to 
ihe Secretary of State Gohn Forsyth), dated 



68 LIFE OF FRIEDRICH LIST 

December 12, List suggests that it would be well 
for the Government to appoint a Consul-General 
as Representative to the German Customs Union, 
and proposes himself for the post, Leipsic being 
an excellent centre. He supported his suggestion 
by a second letter, giving a full account of the 
position of the Zollverein. " Austria, the Hansea 
towns, Hanover, Brunswick, and the Duchies of 
Mecklenburg have not yet joined this Union. But 
the latter three states, it is believed, will soon do 
so. This event will to a certainty take place on 
the death of the present King of England. . . . 
Even Austria seems to be inclined to treat on 
[? for] the reception of her German provinces, if 
we can rely on the assertion of the King of Bavaria 
contained in his last speech to the estates of the 
Kingdom. Thus we may expect that all Germany, 
with more than thirty-three millions of inhabitants, 
will form after a short time, in respect to their 
foreign relations, only one commercial power. But 
even as it is, it comprises above twenty millions 
of inhabitants, and is important enough to attract 
the attention of England, France, Belgium, and 
Holland, as you will probably have heard from 
the English and French newspapers." 

Another letter deals with a still more interest- 
ing subject, though one in which List's suggestion 
bore no fruit. He sets forth (rather oddly, when 
we remember his activities of 1827-28) that "by 



AMERICA, 1825-1830 69 

the reduction of the tariff in 1833 the United States 
contributed more than any other country of 
the civilized world to introduce into practice^that 
t principle, by which the welfare of mankind 
will be more promoted than by any other, that 
is to say, the Liberty of Commerce."^ Unluckily 
the example has not been followed in Europe. 
Some countries, for instance Russia, have even 
strengthened their prohibitive system, while their 
exports to the States have increased on account 
of the above-mentioned measure. This policy has 
its roots not so much in the ignorance of Govern- 
ments as in individual interests and prejudices. A 
change in public opinion is required. "Nothing 
would contribute so much to work such a change 
than (sic) a congress of representatives of the 
principal nations, the task of whom would be 
to discuss in common the hindrances of the liberty 
of commerce and the means to approach by-and-by 
to that much-desired object. They would not have 
to conclude treaties or to make particular pro- 
positions ; they would only have to elucidate the 
principle that the concession of every nation to 
promote the general free intercourse must depend 
on the concessions of all other free nations, and 
thus to prepare public opinion for such changes, 
and to support the Governments in their pro- 
positions to the representatives of the nations." 
France would almost certainly join in such a 



70 LIFE OF FRIEDRICH LIST 

project, and England very probably, " as the repeal 
of the Corn Laws must become soon one of the 
principal objects of a reforming Ministry, in which 
they will have to encounter powerful personal 
interests and prejudices." He suggests that the 
proposition should be made by President Jackson 
in his next message to Congress, and concludes 
with a necessary explanation. " These proposi- 
tions are in full accord with the opinions I have 
pronounced on former occasions. For at all times I 
I have been an advocate of the Liberty of Com- 
merce, provided that the principal nations are 
approaching that object in the same true and 
right spirit. I only contended that ' no nation, \ 
without injuring the foundations of its prosperity,/ 
could walk that way alone. "| The extension of the 
Zollverein, however, which meant the breaking 
down of so many customs barriers, showed that 
the age was tending in that direction, and the 
next step of most continental nations "will be to 
ask England to abolish her Corn Laws and moderate 
her tariff. Thus the old continental system of 
Napoleon will be revived, but on a more favourable 
basis and with a great deal more efficiency." 

A third letter described List's services to the 
United States during his stay in France. He had 
suggested to Van Buren a Commercial Treaty 
with France and the reduction of the duties on 
French wines, with the double aim of increasing 



AMERICA, 1825-1830 71 

the trade between the two countries and of 
inducing the French Government to acknowledge 
the American claims for compensation arising out 
of the Napoleonic war. He had discussed the 
matter with Mr. Rives in Paris, and had published 
articles in the Revue Encycloptdique. "The 
circumstance that I opened these discussions by 
the suggestion of a general system of railways 
throughout France, is to be ascribed to our inten- 
tion to disguise the real object of the essays and 
to attract to them public attention." He also 
attempted, in the interests of the Southern States, 
to get the French Government to substitute an 
import duty on tobacco for their monopoly, and 
pointed out to Mr. Rives the advantage of Belgian 
independence as opening up a rival route to 
Germany against that from Amsterdam. "In the 
course of the three latter years I have, in want of 
another employment, turned my attention to the 
introduction of a system of railroads throughout 
Germany, and so far have been very successful." 
In spite of his diplomatic phraseology there is no 
doubt that List's advocacy of railroads was at 
least as keen as his interest in questions of 
American trade. 



CHAPTER III 

EUROPE, 1831-1846 

LIST during his enforced stay in Hamburg was 
not solely occupied with his railway projects. He 
had long cherished the plan of an encyclopaedic 
work on all departments of politics and political 
economy, which might play the same part in 
spreading new ideas through nineteenth-century 
Germany as the " Encyclopedic " in eighteenth- 
century France. In Paris he had already corre- 
pondeds with German publishers upon the matter, 
and now his proposals were accepted by the firm 
of Hammerich in Altona. He secured as his col- 
leagues in the work Rotteck and Welcker, two 
distinguished professors at the University of 
Freiburg in Baden, an institution noted among 
German seminaries for its support of the Liberal 
and national movement. Indeed, Rotteck (the 
author of a " Universal History " ) had carried his 
enthusiasm so far that a Liberal paper which he 
edited, Der Freisinnige, had just been suppressed, 
and he had been deprived temporarily of his 
Professorship. Both men entered heartily into 

72 



EUROPE, 1831-1846 73 

List's plans, and in fact the chief editorial responsi- 
bility lay with them, while List, although he con- 
tributed important articles, took a share in the 
business management of the enterprise and in 
the negotiations with booksellers. In this work 
fortune involved him, as usual, in many difficulties 
and disputes. 

The " Staatslexicon " appeared at intervals 
during the next twenty years (Welcker continuing 
it after Rotteck's death) and gained a high position 
among German works of reference. List's con- 
tributions are contained in the first, second, and 
fourth volumes. The most important is that on 
railways and steam transport, which he reprinted 
in 1838 as a pamphlet under the title "Political 
and Economic Aspects of the German Transport 
System." l 

The year in Hamburg ended before his work 
for railways had met with any success. "The 
spirit of enterprise," he wrote, "is dead here." He 
also visited Denmark without result, but found 
some response among the merchants of Lubeck. 
In the spring of 1833 he settled at Leipsic, having 
come to the conclusion that the German railway 
system could be initiated best by a line between 
Leipsic and Dresden. Leipsic, he saw, was the 
central point of Germany's internal trade, and 

1 "Das deutsche National-Transport-System in Volks- und 
staatswirtschaftlichen Beziehung." 



74 LIFE OF FRIEDRICH LIST 

especially of the trade in books and manufactured 
goods. But even here his ideas at first made 
little headway. The average German of that day 
looked upon railways much as most of us have 
regarded airships they would never be other than 
dangerous and impracticable. One or two short 
stretches of line between neighbouring towns had, 
indeed, been planned or opened; but these were 
scarcely more than tramways, and List's scheme 
for a systematic network of rails throughout 
Germany was thought wild and visionary. A 
friendly bookseller, who met him at this time, 
may represent the impression he left even on his 
supporters. "List has acted here in a most 
honourable way. His knowledge, his active 
intellect, and his personal charm filled me with 
admiration and respect. But from the first moment 
of our acquaintance I realized that he was an 
inveterate visionary, who foresaw glittering and 
successful results for all his schemes. His expec- 
tations are always exaggerated, and since only the 
future can prove them false we must perforce be 
silent." 

At last, however, List gained the interest and 
support of some young business men, among them 
Gustav Harkort, whose more famous brother, " der 
alte Fritz," had a few years before written articles 
on the possibilities of railway transport, and had 
even made tentative experiments in Westphalia. 



EUROPE, 1831-1846 75 

Thus encouraged, List busied himself with a 
survey of the ground between Leipsic and Dresden, 
made inquiries concerning existing traffic, and 
collected information about the cost of materials 
and the wages of labour. The result of his investi- 
gations was published in pamphlet form under the 
title " Thoughts on a Railway System for Saxony, 
as the Foundation of a System for the whole of 
Germany, and in particular on the building of a 
Line from Leipsic to Dresden" 1 (1833). The argu- 
ments of the pamphlet were liberally supported by 
illustrations drawn from his American experience, 
and he appended a scheme for raising the necessary 
capital by means of a joint-stock company. On the 
last page, beneath the map, "das deutsche Eisen- 
bahn-System," is a rough sketch of an extremely 
primitive type of train which illustrates a practice 
occasionally resorted to in those days of low 
speeds. Two parties of travellers are voyaging 
luxuriously in their own open carriages placed on 
railway trucks ; the public carriage is a most un- 
wieldy omnibus with a second tier of seats on the 
roof. Whether this pattern was actually adopted 
by the Leipsic engineers or was merely a flight of 
fancy on the part of the draughtsman, it looks at 
least more comfortable than the cattle trucks 

1 " Ueber ein siichsischcs Eisenbahn-System, als Grundlage 
eines allgemeinen deutschen Eisenbahn- Systems und inbcsondere 
ubcr die Anlegung ciner Eisenbahn von Leipsic nach Dresden." 



76 LIFE OF FRIEDRICH LIST 

which were at first the lot of English third-class 
passengers. 

The accompanying map is a noteworthy achieve- 
ment of scientific imagination, for in it List's 
prophetic hand outlined practically the whole of 
the present German railway system. Lines from 
Prague to Leipsic and Dresden, Berlin to Leipsic, to 
Breslau, Danzig, Stettin and Hamburg, Hamburg 
to Lubeck and Bremen, Bremen to Hanover, Bruns- 
wick and Magdeburg, Leipsic to Gotha, Gotha to 
Nuremburg and Munich, Minden to Cologne, Basle 
to Carlsruhe and Frankfort, Carlsruhe to Stuttgart, 
Ulm, Augsburg and Munich, Augsburg to Lindau 
these and their connections are all traced at a 
time when even England could only show a few 
isolated railways. And it was largely owing to 
List's untiring work that before two decades went 
by the prophecy became an accomplished fact. 

Copies of the pamphlet were sent to the King 
of Saxony, to members of the Court and the 
municipality, and to other leading men. Its recep- 
tion was sufficiently favourable to encourage the 
supporters of the line to hazard the enterprise. 
After much negotiations the doubts of the Govern- 
ment and the general public were partly overcome. 
The former gave its sanction to the scheme, and in 
May, 1835, the company was floated. The first 
section of the line was opened on April 24, 1837. 

As soon as the permission was given, List 



EUROPE, 1831-1846 77 

hurried to Berlin to persuade, if possible, the 
Prussian Government to grant concessions for 
lines between Berlin, Magdeburg and Hamburg. 
He urged their strategic importance, but for some 
time no definite result was achieved. Meanwhile 
he busied himself with projects for other lines, and 
in the winter of 1835, founded a paper with the 
imposing title, The Railway Journal or National 
Magazine of Inventions, Discoveries and Progress 
in Commerce, Industry, Public Undertakings and 
Public Institutions, and of Statistics, National 
Economy, and Finance. 1 Almost the whole of its 
contents were written by List, including a lively 
attack ton an English engineer, Elliot, who had 
explained to the people of Hamburg that a German 
railway system was impracticable. " We respect 
and admire the English," declared List ; " they seem 
to us the ideal of a nation, especially in economic 
matters, and we are always advising our country- 
men to follow in their footsteps. But when they 
bring us presents, whether of money or good 
advice, then we fear these Greeks et dona fercntes." 
The paper soon stood high among the technical 
journals of the day, but at the end of its first year, 
for no apparent reason, an official prohibition shut 
it out from Austria, and List thus lost a large 

1 Das Eiscnbahnjournal oder National-Magasin fur Erfindun- 
gen, Entdeckungen, nnti Fortschritte in Handel und Gewcrbc, in 
f/entlichen Unternehmungen und Attstaltcn, so u'it fiir StatUtik 
\iitiffnal0konomie und Finamu-esen. 



;S LIFE OF FRIEDRICH LIST 

proportion of his subscribers. The paper had to be 
dropped, and on this blow followed another when 
the financial crisis in America seriously reduced 
List's means. Other troubles embittered these 
years. Difficulties arose over his status as 
American representative in Leipsic, difficulties for 
which (he constantly affirmed) he had to thank his 
old enemies in Wiirttemberg, and even his work 
for railways was spoilt by quarrels and misunder- 
standings. According to List (in the preface to the 
" National System ") and Hausser (in the biography) 
the committee of the Leipsic-Dresden railway, who 
had promised "not to treat him as Yankees would," 
nevertheless behaved with much unfairness and 
even dishonesty. The main grounds of complaint 
appear to have been three : that List was not a voting 
member of the committee, which was restricted to 
natives of Saxony, but was co-opted as an expert ; 
that he received many affronts from the members, 
though by neglect of his advice the line was both 
more costly and less useful than it should have 
been ; finally, that he received an informal promise 
of remuneration (some shares in the company and 
a position in its management) which was never 
fulfilled. 

Another version of the matter is given, with 
less invective, in the life of Fritz HarkorL 1 Harkort 
also, as a member of another state, had to serve 
1 " Der alte Harkort," von L. Berger Witten. 1891. 



EUROPE, 1831-1846 79 

on the committee by co-optation. Much of the 
disagreement between List and the local directors 
was due to the difference in their aims. They were 
working for the success of the single line, while he 
regarded it merely as a link in the future German 
system. Hence they could not fall in with all his 
suggestions, and his optimism often led him astray. 
For example, he was confident that the line could 
not cost more than a million thalers, whereas it 
proved that more than five times this sum was 
required. The committee had a complete answer 
to the charge of dishonesty, but forbore to publish 
it at the time when Hausser's " Life " appeared, out 
of pity for his tragic end and respect for his surviv- 
ing relatives. It is hardly possible at the distance 
of seventy years to sift out the actual facts from the 
conflicting stories of interested persons. It seems 
probable that List in his proposals did not make 
sufficient allowance for existing conditions, that 
hence quarrels arose, and that after the rupture he 
had some reason to complain of his treatment. 
But in almost every undertaking in which List had 
a share he sooner or later became involved in 
quarrels, so that we may conclude he was unfortu- 
nate either in his temperament or in his colleagues, 
or perhaps in both. He was certainly a man of 
great impetuosity, and too prone to measure 
German enterprise by American standards. List 
twice received a gift of 2000 thalers from the 



8o LIFE OF FRIEDRICH LIST 

committee, with a vote of thanks for the services 
he had rendered; but this was small compensa- 
tion for his American losses, although these 
ultimately proved to be less ruinous than he at 
first feared. 

The general opinion of the Leipzic public 
seems to be expressed in a report sent from the 
Prussian Consulate there to Vienna, and dated 
July 17, 1835. The writer says 

"Although the experience he acquired in America, and 
the additional knowledge he gained by two years of work and 
study devoted to railway affairs, have enabled Herr List to be 
of much service to the undertaking, yet he has always gone 
to work with such sanguine expectations and views that the 
committee have been forced to hold him in check. This is 
especially true of the Railway Reports he composed, which 
had always to be modified by the committee after disputes 
with their author. Every one recognizes the good intentions 
of Herr List, his enthusiastic activity, and his expert know- 
ledge, but every one is careful not to put unqualified faith in 
his schemes. Herr List's means are at present reduced, which 
fact made him wish for the position of a paid agent in the 
company. Owing to his quarrel with the committee he has 
been disappointed in this expectation, and he probably considers 
the two thousand thalers voted to him by the present director- 
ate as an insufficient return for his labours. With this view I 
myself agree, since it is generally considered (and admitted by 
some of the directors) that he has given the most effective and 
powerful impulse to the Leipzic-Dresden railway, and through 
it to German railways in general, and by the advice he has 
given here, and especially by his talent for influencing public 
opinion in the matter (which talent has been recognized by 



EUROPE, 1831-1846 81 

the authorities concerned), he prepared the way for the succes 
of the enterprise." 

This letter is reproduced with other corre- 
spondence in an essay upon List by Dr. Max Holtzel 
of Stuttgart. 1 He shows how keenly Metternich 
and his agents in Germany watched List's move- 
ments after his first activity in Wurttemberg, and 
how anxious the Austrian Minister was at this 
time to put pressure on Saxony and the United 
States with the help of the Wurttemberg Govern- 
ment and to deprive the exile (whom he describes 
as "the most active, wary, and influential of the 
German revolutionaries " ) of the protection of 
office. The Saxon representative at Stuttgart 
even asked the Wdrttemberg Government in 
September, 1834, whether it objected to List's 
co-option as an expert on the railway committee, 
and permission was graciously given on the express 
ground that the business would keep him away 
from WQrttemberg. 

Yet in January, 1836, he visited Wurttemberg 
and met with great cordiality. " I have had a 
wonderful reception," he wrote, "friend and foe 
met me with open arms. The whole country 
seems to beg my forgiveness for the wrongs I 
have suffered. . . . Privy Councillor K. seized 
hold of me and danced round the room crying, 

1 " Prcussischc Jahrbiicher," 1903. 



82 LIFE OF FRIEDRICH LIST 

1 List is back ! List is back ! Now there will be a 
little life in Wurttemberg again.'" But when, 
after a vist to Carlsruhe, he returned in March 
to put forward a plea for restitution of citizenship, 
the King's answer was that he must be regarded 
as a foreigner whose stay in the country was con- 
ditional on his good behaviour. He would not 
remain in his native country on these terms, and 
returned to Leipsic. His troubles there, however, 
determined him on a new departure. In the later 
autumn of 1837, he left Germany for Paris by way 
of Belgium, accompanied by his daughter Emilie 
and his only son, Oskar. The latter, a boy of 
seventeen, he settled in a technical school at 
Brussels. List himself found a friendly welcome 
in that town, King Leopold promising to recom- 
mend him to his father-in-law, Louis Philippe. At 
Ostend, whither he went for health's sake, he met 
Dr. Kolb, a former pupil at Tubingen and editor 
of the well-known Augsburger Allgemeine Zeitung. 
List had already contributed some articles to the 
paper; he now became one of its permanent 
correspondents, and many of his ablest essays 
gained wide publicity in its columns. In Paris 
the King and Ministers were friendly, but he was 
soon diverted from the advocacy of a French 
railway system to a new interest. The Academy 
had just offered a prize for the best essay on the 
following topic : " Lorsqu'une nation se propose 



KUROPE, 1831-1846 83 

d'ctablir la liberte du commerce ou de modifier sa 
legislation sur les douancs, quels sont les fails, 
qu'clle doit prcndrc en consideration pour concilier 
de la maniere la plus equitable les interets des 
producteurs et ceux de la masse dcs consom- 
mateurs?" In spite of the short time which 
remained before the date fixed for delivering the 
essays, List determined to compete. A letter to 
his wife (January i, 1838) shows with what energy 
he threw himself into the work. " We have cele- 
brated the New Year right merrily and only got 
to bed at four o'clock this morning. I am through 
with my work. You can imagine what it is like 
when I tell you that it would fill two moderately 
stout printed volumes. This has all been written, 
translated into French, and annotated in six weeks. 
I have worked from one or two o'clock in the 
morning until ten, then to the library till three, 
work again till five-thirty, then dinner, and bed at 
seven or eight. I have never worked better in 
my life or been in better health. For the last few 
days I have not even gone to bed, but only slept 
an hour or two on the sofa. . . . Meanwhile I had 
to put everything on one side, King, Ministers, 
friends, correspondence ; I could not waste a 
moment There was no question of theatre-going 
or newspaper reading. I hardly know what has 
happened in the outside world." 

The immediate result seemed an inadequate 



84 LIFE OF FRIEDRICH LIST 

return for such excessive labour. The Academy 
awarded no prizes, although the judges commended 
three essays, among them List's, as ouvrages 
remarquables. List attributed his comparative 
failure, not to the difficulties of writing under high 
pressure in a foreign tongue, but to the prejudice 
of his judges, since two of them (Blanqui and 
Rossi) belonged to the " school " of Adam Smith, 
whose theories he was combating. 1 

But he turned the failure to good account. He 
felt the necessity of systematizing his economic 
theories, and of extending and strengthening his 
historical knowledge before he could venture to 
draw trustworthy conclusions. Looking over the 
printed introduction to his projected American 
book, he found its historical basis "pitiable." 
Hence, on September 6, 1838, he wrote to Cotta 

"For many years I have been collecting ideas and 
materials for a new system of National Economy, and I have 
now decided to begin the work. The subject for a Prize Essay 
of the Academy ' Free Trade in International Commerce ' 
instigated me to submit in answer the main arguments of my 
unwritten book, and though I could not spend more than 
three weeks on the essay, yet it was named as the most 
remarkable of twenty-seven. 3 The Academy did not award 

1 See his preface to the " National System," p. 17. 

* This double inaccuracy only a few months after the event 
about which List writes is puzzling. In the preface to the 
"National System" the actual six weeks spent over the essay 
have dwindled to " about a fortnight." 



KUROPE, 1831-1846 85 

the prize for reasons which I consider worthless, but they 
framed a new question out of my essay, without acknowledging 
the source. ' On the importance of the German Zollverein 
and the application of its principles to other countries.' This 
was already answered in my essay. A man of standing assured 
me that the Academy was a ' den of thieves/ and I had no 
desire to provide these gentlemen with materials for their 
own books. So I intend to re-cast my essay as a book, 
complete in itself but also serving as an introduction to a 
larger work, that is to a new system of political economy. 
This book, with the title ' International Free Trade, and the 
Union of States under International Law,' will show how far 
free trade is desirable in theory and can be attained in 
practice, and will explain that as nations advance in industry 
and trade, in knowledge and culture, in political institutions 
and mechanical inventions, what we now call international 
law will become the common law of federated states. My 
aim will be practical rather that theoretical. You remember 
how some years ago, in the Allgcmeiru Zeitung^ I urged the 
President of the United States to propose an international 
congress on trade. Secretary Van Buren, with his mole- 
politics, could not grasp the idea ; but now the nation is ripe 
for it, and I hope they will force the Government into action. 
In France theorists and practical men, administrators and 
manufacturers, merchants and producers, hold sharply opposed 
views, and none of them have hit the nail on the head. 
England is content with her system, except that the Corn 
I-aws depress industry and the labouring population for the 
benefit of the landed aristocracy. In Germany, too, we are 
astray ; in spite of Nebenius the Handelsverein has no firm 
basis. Nebenius is too much hampered by his admiration of 
Adam Smith, he has thought and reflected much, but has seen 
little and has had no experience. Besides, his crabbed 
sentences make wearisome reading. 

" You see that such a book, if well written and to the point, 



86 LIFE OF FRIEDRICH LIST 

must win publicity and influence. You must judge whether 
mine will fulfil these requirements from the contributions which 
I send to your Quarterly as specimens." 

The next three years were devoted to historical 
research. French politicians, especially Thiers, 
were so much interested in his theories that at 
one time he thought of writing his book in 
French, and gave up the idea with some reluctance. 
In his spare time he contributed articles to the 
Allgemeine Zcitung, some on "The English Theory 
of Free Trade before the Judgment Bar of History " 
to the Constitutionel (1839), an d an important series, 
based on his French Essay, to the Deutsches Viertel- 
jahrschrift (1839-40). These last, "Free and Re- 
stricted Trade," are reproduced in many passages 
and chapers of the " National System." Writing 
on " English Corn Laws and German Protection " 
(Allgemeine Zeitung, 1839), he blamed English land- 
lords for insisting on heavy duties at the close of 
the Napoleonic War. "Like a two-edged sword, 
the Corn Laws inflicted a double wound on English 
trade ; they set bounds to the growth of English 
manufactures, and they called into life the pro- 
tective systems of the United States, Germany, and 
Russia, which have nourished manufactures in 
these lands to become serious competitors of 
England." 

These busy years were passed in the Rue 
Navarino, not far from the Rue des Martyres 






KUROPE, 1831-1846 87 

where Heine lived, one of the few Germans with 
whom List held much intercourse during his 
stay in Paris. His chief pleasures, after the 
arrival of his wife and the other children in 1838, 
were found in his own family circle. " Our 
father was then in good health," wrote his daughter 
Emilie later of those days, " and when that was 
the case we needed nothing more to make the 
house cheerful and happy. He always came home 
in good spirits, told us what went on abroad, 
and understood to perfection the art of enter- 
taining and instructive conversation. I do not 
think that there can ever have been a more 
indulgent and loving father." A note to his 
youngest daughter, a child of twelve, written in 
1841, when the family were in Italy, gives us one 
of" the rare glimpses of List in his gentler mood. 
" I am writing to you to-day, since my last 
letter was from you, and I will send you a good 
long letter in spite of the shortness of yours. 
Your tiny note contained more excuses than I 
liked. You tried to justify its shortness by the 
plea that nothing new had happened. It is not 
merely the new that interests me, I like to know 
the old as well. You can tell me what people 
you see, how you like them and what they think of 
you, who are your companions in the house and 
what you know about them, what your servant is 
like, and how you spend your day, how your rooms 



SR LIFE OF FRIEDRICH LIST 

are furnished, and how you get on with Italian. 
All this would give you the means of writing more 
than one long letter. And you would be rewarded 
for your pains, since it is only practice that makes 
a good writer." 

This happy life was rudely broken by a great 
loss. His son Oskar had long cherished a wish to 
become a soldier, and at last gained his father's 
consent. He entered the French Army, showed 
promise of rising in his profession, and was sent 
to Algiers. There, in 1840, he died of malarial 
fever. List was heart-broken, nor did he ever 
fully recover from the blow. A suggestion from 
Thiers that he should enter Government employ 
was refused, for his thoughts turned homeward. 
In the summer of 1840 he left France, going first to 
Leipsic to settle some outstanding matters con- 
nected with the " Staatslexicon." He found a fresh 
railway agitation on foot, into which he threw 
himself with all his old energy. 

The towns of the beautiful Thuringian district 
(Gotha, Weimar, Jena and the rest) were not in- 
cluded in the route of a proposed railway from 
Halle to Cassel and Frankfort. List poured forth 
a series of articles over the pseudonym of the old 
patriot "Justus Moser"; in them, and in personal 
interviews, he fought for the longer route with all 
its political and financial advantages. The scheme 
was accordingly revised in harmony with his 



EUROPE, 1831-1846 89 

suggestions ; he gained the reward of an honorary 
doctorate from the University of Jena, and a 
money gift from the Thuringian Railway Company. 
The latter inspired his jest that each of the three 
Duchies which the company declared he had 
"saved," must be worth merely 33 J louis d'or. 
His hopes of a more satisfactory recognition for 
his services led him to bring his family to Weimar, 
but he was disappointed. After this he made a 
temporary home in Augsburg, where he had the 
pleasure of intercourse with Kolb and other friends. 
He worked quietly at his book, and it appeared in 
May, 1841, under the title "The National System 
of Political Economy : International Commerce, 
Commercial Policy, and the German Zollverein." l 

It bore the same motto as his essay for the 
Academy, " Et la patrie et I'humanit6" 

In the same month he visited Wurttemberg, 
partly in the hope that through his old friend 
Schlayer, now Minister, he might get a post in the 
State railway department. On the journey he 
broke his leg and was laid up for some time at 
Cannstatt, near Stuttgart. This mishap brought 
about a reconciliation with Menzel ; the two men 
had had a literary quarrel some years before. 
"The news came to me," Menzel wrote in his 

1 "Das nationale System der politischcn Ockonomic. Der 
Internationale Handel, die Handclspolitik und der deutsche 
Zollverein." 



90 LIFE OF FRIEDRICH LIST 

reminiscences, "one Saturday. I hurried to him 
at once. He lay there with bandaged foot, and 
turned that familiar Titanic head, little changed 
with years, to gaze at me. ' You have come ? 
What a pleasure ! You are the first who has given 
me a thought.' From that hour we were good 
friends again, and I visited him almost daily until 
his recovery. He always came to see me after- 
wards, on his journeys from Augsburg to Stuttgart, 
and he remained my firm friend up to his death." 

When convalescent he went to recruit at Wild- 
bad in the Black Forest alone, for his family were 
at this time in Italy, where his daughter Elise was 
training as a singer. Returning to Stuttgart he 
made another vain attempt for the revision of his 
sentence. A new literary project met with greater 
success ; the reception of the " National System " 
(a second edition had been called for within four 
months of its publication) induced Cotta to look 
with favour on List's proposal to found a weekly 
journal in support of the Zollverein. The Con- 
gress of 1842, at which representatives of the 
different states belonging to the union met to 
discuss the arrangement of the tariff, showed 
clearly that List's book had made its mark on many 
minds, though at the same time the supporters of 
free trade still enjoyed considerable authority and 
influence. List firmly believed, or at least asserted, 
that the German free trade party was encouraged 



KUROPE, 1831-1846 91 

bv English statesmen for their own sinister ends, 
and when the first number of the Zollvereinsblutt 
appeared in January, 1843, he used it as a medium 
for some fiery attacks on English policy. The 
paper carried on an untiring agitation for a 
" national " commercial system, and its arguments 
\svre set forth with a wealth of illustration, a 
iety of treatment, and a flow of eloquence un- 
known till then in German economic discussion. 
List was peculiarly fitted for the post of editor. A 
born journalist and agitator, he had the double gift 
of collecting material from all possible sources and 
of presenting it in new and attractive guise. A 
well-known passage in an early number paints 
in glowing phrases the benefits of a national 
mercantile marine. 

"The sea gives strength to nations as to individuals, 
refreshment to their members and life to their minds. It fits 
them to undertake great projects, accustoms their physical and 
mental vision to distant views, and cleanses them from all 
those stains of Philistinism which are so great a hindrance to 
national life and national progress. From time immemorial 
salt water has healed national ills ; it clears away pretence 
and windy, unpractical philosophy, the itch of sentimentality, 
the palsy of printed words, the obstructions of learned 
pedantry, and eradicates academic languor and phantasies of 
all kinds. The sea strengthens the whole constitution, for it 
brings riches and enjoyment, comfort and good cheer within 
the reach of the mass of the people. Sea-going nations laugh 
at economists who cling to dry land and preach systems of 



9 2 



LIFE OF FRIEDRICH LIST 



penury and starvation, for they know well that the sea has an 
inexhaustible store of good things for those who have courage 
and strength to take them." 

The moral List drew was the urgent need for 
strengthening the Zollverein by the accession of 
the Hanse Towns, in spite of the English leanings 
shown by Hamburg. 

Though the tariff question overshadowed all 
others, he worked with untiring vigour for other, 
means of advancing national unity for a German 
postal system, for railway extension, and above 
all for Parliamentary government in place of the 
narrow bureaucracy which hampered all the states. 
He pointed his advocacy by a reference to the 
great man who was already coming to the front 
in English politics. 

" William Ewart Gladstone, Vice-President I of the Board 
of Trade and Master of the Mint, is still full young, so young 
that according to the laws of many German states he could 
not marry without special leave. Yet he is Peel's right hand 
and will be Chancellor of the Exchequer before long. . . . 
Undoubtedly his great name is not factitious but real. This 
is proved by his work on ' Church and State ' which was the 
beginning of his reputation, and by his labours over the tariff. 
This year and last the whole burden of reform rested on him 
and Sir Robert Peel, and though Sir Robert Peel is admittedly 
far his superior in readiness and dexterity of debate, yet every 
one knows that Gladstone provided the Premier with the main 
part of his materials. We cannot refrain in this connection 
from considering what Gladstone would have become if Fate 



EUROPE, 1831-1846 93 

had made him first sec the light in a bureaucratic country. 
Probably only a practising lawyer or referendary of the third 
or fourth class, if he were not still immersed in preparing for 
his examination. Perhaps in ten or twenty years' time he 
would reach secretarial rank, and at the end of his life become 
a Councillor of Chancery, always provided that he had not 
through rash speeches or writings incurred the displeasure of 
the heads of his department. The striking difference between 
bureaucratic and parliamentary government is, that in the 
latter young talent can easily make its way, while in the 
former it can only reach its fitting sphere through chance or 
routine. Stall feeding marks a great advance in farming, but 
among sheep we find that the best leaders of the flock are 
reared in open pasture." 

In September, 1844, some despatches of Lord 
Westmoreland (British Ambassador at Berlin) to 
the home Government were published. In them 
it was explained that the Prussian Government, 
with its free trade sympathies, was opposed to 
any further advance in the duties levied by the 
Zollverein, and hoped "to resist the more ex- 
tensively menaced injury to the commerce of 
England." List seized upon the phrase and made 
it the text of a series of attacks upon English com- 
mercial selfishness. The Ambassador in one letter 
referred to him personally as "a very able writer 
in the employ of the German manufacturers;" to 
which List bitterly replied that "unfortunately it 
was not true, for the manufacturers did not take 
sufficient interest in the matter to require a paid 



94 LIFE OF FRIEDRICH LIST 

agent." Since his return to Germany in 1840 he 
had received about three thousand florins in pay- 
ment for his book, one thousand three hundred 
and twenty-five florins from the manufacturers in 
the Zollverein towards the publication of the 
ZoUvereinsblatt, and a gift of three hundred and 
sixty florins from some Bohemian manufacturers. 
This total of four thousand six hundred and eighty- 
five florins gave him in the eight years (from 1837 
to 1845) during which most of his time was devoted 
to the movement, an average annual income of 
about five hundred and eighty-five florins (or 
58 55.). " I must add that the contribution from 
the manufacturers (mainly those of Wttrttembergj 
reached me the year after that (1842) in which Lord 
Westmoreland wrote the despatch in question." 
It is, indeed, entirely obvious that throughout his 
life List was seldom actuated by motives of self- 
interest. Only in the railway disputes at Leipsic do 
there seem to have been monetary considerations to 
embitter the quarrel. He was ever ready to pre- 
dict that each fresh venture would give him riches, 
but when the riches proved visionary, he made 
little complaint. During 1844 he was actively 
interested in negotiations between Belgium and 
the Zollverein, which ended in a commercial treaty, 
and he visited Brussels in pursuit of that end. 
On his journey home he travelled up the Rhine 
to recruit his health, which had been affected by 



EUROPE, 1831-1846 95 

his exertions. Approaching Mainz, he found that 
the question of a railway from the city along the left 
bank of the river was just then hotly disputed, and 
he composed on board the boat a sparkling dialogue 
between an old colonel and a Government official. 
Its aim, of course, was to help the supporters of 
the railway. " When God created Germany," says 
the colonel, "it was a shapeless, worthless mass 
of sand and mud. Then He put the Rhine behind 
it, and Germany stood up strong and straight. If 
only I could find a metaphor apt enough to show 
you what the Rhineland is to us. Ah, I have it ! 
The Rhineland, gentlemen, is the backbone of the 
German ox ! " The dialogue was published under 
the title, "The German Railway System" in the 
Allgemcine Zeitung, to which, in spite of his occupa- 
tion with the Zollvereinsblatt, he still sent contribu- 
tions. Two of the most noteworthy were on "The 
Land Question, Small Holdings, and Emigration " 
(1842), and " On the Relation of Agriculture to 
Industry and Trade" (1844)1 These expanded and 
emphasized the teaching of the " National System." 
In the autumn of 1844 List visited Austria and 
Hungary as a missionary of protection to native 
industry. In both countries he was well received ; 
German though he was, Kossuth, Apponyi, and 
other Hungarian leaders treated him with great 
cordiality, and his ideas found ready acceptance. 
Indeed, before his death he declared that protection 



96 LIFE OF FRIEDRICH LIST 

in Hungary was being carried too far. At a com- 
plimentary banquet in Vienna he explained the 
political designs that so often appear in his writings, 
and referred to his visit to the city twenty-five years 
earlier on behalf of the embryo Zollverein. " Born 
and partly brought up under the benignant rule of 
the Germanic Emperor, from my youth I have 
always cherished in my heart the name of Austria. 
But it was not sentiment alone which at that time 
turned our steps to this capital. It was the con- 
viction that the Empire state must lead all our 
great national movements, if they are to reach 
their goal." It was not until just before his death 
that he came reluctantly to realize that Prussia 
rather than Austria must be the leader of national 
union. 

During his long absence (until July, 1845) the 
Zollvcrcinsblatt was edited by Dr. Togel, and this 
gave rise to rumours among his enemies that he 
had left Germany for ever. He refuted them by 
returning and taking up his work with undi- 
minished vigour. Tributes of welcome poured 
in upon him from all parts of Germany, but he 
was in bad health and full of gloomy foreboding 
for the future of his family. What would become 
of them in the event of his death ? 

Physical and mental troubles made him feel 
more acutely than of old a new series of bitter 
journalistic attacks which just at this time were 



EUROPE, 1831-1846 97 

directed against him. His family watched these 
fits of depression with anxiety, but a short visit 
to Bad Rippoldsau that charming spot in the 
Black Forest acted for the time as a restorative. 
He was able during the winter to contribute two 
important series of articles to the Zollvereinsblatt 
on " English Commercial Policy " and " On the 
Political and Economic Unity of the Germans." 

The course of events in England naturally 
absorbed List's attention. In the " National 
System" (chapter xv.) and in earlier writings, he 
had expressed the opinion that England would 
soon adopt free trade, irrespective of the policy 
of other nations, in order to get raw material on 
the most advantageous terms, and to maintain the 
high quality of her manufactures. During the 
repeal agitation he had declared (Zollvereinsblatt ', 
November 20, 1843) that what England understood 
by free trade was only the free admission of corn 
and tropical products ; but now that Peel's policy 
of free imports was unmistakable, he still main- 
tained that it would bring no benefit to Germany. 
The repeal of the Corn Laws (he said in a " New 
Year's Sermon," January 6, 1846) would ruin many 
of the English Laded aristocracy, and those who 
remained would be forced to give greater freedom 
of tenure to their farmers. Hence the political 
influence of the landed interest would be greatly 
weakened, and the commercial and manufacturing 

H 



98 LIFE OF FRIEDRICH LIST 

interests proportionately strengthened. Gladstone 
had said, " We became rich under protection, we 
shall become richer under free trade." But the main 
effect of the substitution of a revenue system would 
be to benefit the colonies, for the landed interest 
had done its best to hamper colonial agriculture. 
The Turkish Empire, too, was tottering, and must 
soon fall, when England would get into her power 
Egypt, the east coast of Africa, Syria, and all the 
country round the Euphrates, the Tigris, and the 
Persian Gulf. Under any tolerable form of govern- 
ment these regions would be able to support 
twenty millions of the English race. Until they 
and the colonies attained full development Russia 
and North America could supply England with 
corn, and these large imports would entail a 
correspondingly heavy export of manufactures. 
This in its turn would create in England an active 
demand for such produce as could not be imported 
to any great extent: among which List included 
cattle, meat, and butter. The cheapness of the 
necessaries of life would greatly increase popula- 
tion and general prosperity. Buildings and gardens 
would raise the value of land far above the agricul- 
tural level, and at the end of the nineteenth century 
the inhabitants of the United Kingdom would 
number sixty or seventy millions. Germany mean- 
while would only be able to export pipes and 
pickles, bone phosphate and brooms. 



KUROPE, 1831-1846 99 

It is curious to contrast this blend of prophecy 
and fancy, intuition and error, with the plain 
sensible letter in which Cobden six years earlier 
set forth the mutual benefits that might be expected 
from the German Zollverein on the one hand and 
English free trade on the other. 1 But the prospect 
of success in England encouraged German free 
traders to renewed efforts. Cobden's speeches 
were eagerly read; addresses of congratulation 
were presented to Peel ; and in the " Zoll Congress " 
of 1845 sharp differences arose between free traders 
and protectionists. List, on his part, thought that a 
railway from Ostend to Hamburg would be the best 
means of counteracting the evil effects he dreaded 
from the new English policy. This connecting 
link would help on his favourite scheme of over- 
land transport between England and India, from 
which the German railways at all events would 
gain some advantage. As the year advanced he 
determined to visit England, partly to see for 
himself how affairs stood, partly to find more 
efficient correspondents for the Zollvereinsblatt. 
The paper, which he left again in Togel's charge, 
had just passed into his own financial control, and 
he employed for his journey a subscription to the 

1 A letter on the M Prussian Commercial Union," written from 
Frankfort, October 22, 1840, was published in the Anti-Corn Lena 
Circular, and reprinted in " Free Trade and other Fundamental 
Doctrines of the Manchester School," 1903. 



ioo LIFE OF FRIEDRICH LIST 

journal of a thousand gulden sent by a union of pro- 
tectionist manufacturers. In June, 1846, he reached 
London. Frequent contributions to the Zollvereins- 
blatt show the close interest with which he watched 
the political situation, although at times his view 
was curiously warped. An article on July 15, 1846, 
reported on the recently published tariff that " free 
imports of raw material and food, and moderate pro- 
tection to industry is the principle of the new policy," 
which would enable England to compete with 
foreign nations on yet more favourable terms. The 
effect of Peel's measures would be in the highest 
degree injurious to the Continent. List evidently 
thought that what benefits one country must injure 
another. " Nothing will better prove the falsity or 
truth of the National System. In the course of 
the next two or three years the civilized world will 
be able to judge both systems by their fruits. We 
for our part await this decision with confidence." 
A meeting with Cobden did not shake his opinion 
that the new policy was adopted with intent to 
injure continental industry, although he could 
not resist the charm of the great free trader's 
personality. 

" Last night," so runs a letter of June 26, " I 
witnessed two noteworthy events. In the Upper 
House I saw the Corn Law expire amid their 
Lordships' cheers, and a few hours later, in the 
Lower House, I saw Peel's Ministry receive its. 



EUROPE, 1831-1846 101 

death-blow. The very place where I sat in the 
Commons yesterday afforded abundant material 
for observation. On the bench in front of me sat 
the Egyptian Ibrahim with his staff, and from time 
to time leading politicians, among them Lord John 
Russell, would come to exchange a few words with 
him. The accomplished Lord Monteagle (Spring 
Rice), who was most friendly and polite, pointed 
out to me not only the peers and literary men who 
sat near us, but also the chief members of the 
House. Of the speeches I heard, the most eloquent 
were those of Mr. Shiel and Mr. Buller. In the 
House of Lords, Dr. Bowring said to me, ' That 
old gentleman in the blue frock coat with his 
head sunk on his breast is the Iron Duke. . . . 
May I introduce Mr. McGregor to you?' A 
friendly man with a most intelligent face shook my 
hand. ' Mr. Cobden wishes to make your acquaint- 
ance,' I heard from the other side, and a man still 
young, his eyes bright with intellect, held out his 
hand. ' Have you really come over to be con- 
verted?' he said. 'Of course,' I answered, 'and 
to seek absolution for my sins from this reverend 
gentleman ' (Mr. McGregor). So I stood jesting 
for a quarter of an hour amongst my strongest 
political opponents. What a splendid thing politi- 
cal life is here ! You can see history in growth." 

A new scheme which also had impelled him to 
this English visit, was the hope of a commercial 



IO2 

alliance between Great Britain and Germany. His 
admiration for English character and enterprise 
had always been great, in spite of his fre- 
quently professed belief that the main energies of 
British statesmen were devoted to crushing out 
German industry. Above all, the English con- 
stitution had been the object of his warmest praise. 
He had begun also to realize that the South 
German members of the Zollverein could do little 
to withstand the influence of Prussia, which at this 
time was politically friendly to England. During 
1845, side by side with his most bitter attacks upon 
Peel, appeared other articles pointing out that 
Germany and England were by nature meant for 
friendship, and now he appeared, of course without 
official credentials, to ask a hearing for his scheme. 
List's biographers have remarked that it was the 
attempt of a desperate man, perhaps the first sign 
of the mental trouble which later overwhelmed him. 
How could a notorious writer against England hope 
unsupported to make an impression upon English 
diplomats ? Nevertheless, he worked feverishly 
at his memorial, "On the Importance and the 
Necessary Conditions of an Alliance between Great 
Britain and Germany," l and sent copies to Prince 

1 " Ueber den Wert unddie BedingungeneinerAllianz zwischen 
Grossbritannien und Deutschland," published in the Allgemeine 
Zeitung after List's death, and reprinted in Hausser's " Gesam- 
melte Schriften." 



KUROPE, 1831-1846 103 

Albert, Peel, Clarendon (then Foreign Minister;, 
and the King of Prussia. The three first copies 
were no doubt the English version, a draft of 
which lies among the Reutlingen papers. 

The memorial first predicts an English war 
with France which will drive the latter country 
into the arms of Russia. ^Tjje fuUire development 
of the world wjH be in the hands of three races, 
the Germanic led by England, the Latin led 
France, and the Slavonic by Russia A The first, 
mainly represented by England and Germany, will 
be strong enough to resist a combination of the 
other two, if England allows Germany to develop, 
and if Prussia takes her place as the leader of 
German political and commercial life. But England 
can only maintain her supremacy over the United 
States by extending her empire over Asia, Africa, 
and Oceana; for the States will absorb Canada and 
Texas. Thus England's main hope will be a rail- 
way from Germany down the Adriatic coast, along 
the Euphrates and by the left shore of the Persian 
Gulf to Bombay. List presses this favourite pro- 
ject with great earnest ness. Egypt and Asia Minor 
are the natural link between England and her 
possessions in the East. Russia and France will, 
no doubt, put all possible hindrances in her \v. 
but with Germany's support she can ignore them, 
for "the strength of Germany is the strength of 
England." And German strength can only be 



104 LIFE OF FRIEDRICH LIST 

obtained by a policy of temporary protection. Its 
advocates do not reject the theory of universal free 
trade, but they argue that England herself has only 
just reached the stage of development at which free 
trade is beneficial. A German trade and industry 
would be utterly crushed if they permitted the 
competition of so wealthy and powerful a rival. 
The birth of German nationality can only come 
by the help of Prussia. The foundation of the 
Zollverein is mainly due to that state, and the 
Zollverein is the first and most important step 
towards nationality. Only let Prussia look not 
to her own immediate benefit, but to the future 
good of Germany, and let England refrain from 
trying to influence the policy of the Zollverein for 
her own ends. 

The modest, conciliatory, and almost dejected 
tone of the paper is curiously unlike List's ordinary 
style, and seems to reflect the depression of his 
mood He met with kindness and, by his own 
account, encouragement from the Chevalier de 
Bunsen, then Prussian Ambassador to England, 
who held out some hopes of a diplomatic post. 
But though Peel and Clarendon sent him courteous 
answers, the Prime Minister said that his sympathy 
with the object of the memorial could not make 
him agree with the means proposed. He dis- 
believed in the benefits of a protective tariff for 
Germany, and thought that prosperity could be 



EUROPE, 1831-1846 105 

attained more surely by approaches to free trade. 
The copy sent to the King, with a letter in which 
List defended himself against the charge of hostility 
to Prussia, received a mere acknowledgment. 

He returned to Germany in autumn, broken in 
health and spirits. His literary work remained as 
brilliant as ever, but he told a friend in England, 
14 1 feel as if a mortal disease were in my frame 
and I must soon die. If I am to lie sick, die, and 
be buried, I wish to do it in my own country." 
The failure of his self-appointed mission to England 
made him regard the future in the darkest colours, 
and he even thought that the Zollvereinsblatt would 
soon fail. The Society of Manufacturers sent him 
a gift of six thousand gulden. He left it untouched 
at his banker's, and a few months later it was 
handed over to his family. 

Their friendly meeting in London did not pre- 
vent List from making some personal attacks upon 
Cobden for the speeches he had been delivering 
in France. He reproached the great free trader, 
perversely enough, for not first persuading his 
countrymen to change the " relatively high pro- 
tective taxes " on French commodities, such as silk 
and brandy, into revenue duties. This, of course, 
was one of Cobden's chief endeavours, and was 
consummated fourteen years later by his negotia- 
tion of the French Commercial Treaty. 

Friends in Augsburg found List much altered ; 



io6 



LIFE OF FRIEDRICH LIST 



his old irritability had left him, and with it his 
old energy. He suffered from sleeplessness and 
constant pains in the head, and although he still 
worked at new projects he left them half finished. 
The chief interest remaining to him was the 
foundation of a Society of Trade and Industry 
for Bavaria. In November he went to Munich 
to arrange this, and his family took leave of him 
in the hope that the journey, as often before, would 
restore his health and spirits. A few days later 
came a note from Tegernsee in the Tyrol ; he was 
on his way to Meran to try the effects of a milder 
climate. This was the last news they received. 

Bad weather turned him aside from his pro- 
posed route, he went instead to the little Tyrolese 
town of Kufstein and took up his quarters at an 
inn. The landlord allotted him a comfortable 
room ; but List, though he was well supplied with 
money, refused, saying, " I am too poor, give me 
the worst room in the house." He ate little, so 
the landlord said afterwards, and spent much of 
his time in bed ; for he was in great pain, and the 
weather continued to be wretched. On the morn- 
ing of November 30 he left the inn. Night came 
and he did not return. A letter found by the 
landlord in his room disclosed the visitor's identity. 
Its contents alarmed him, and search parties were 
sent out After some hours the body of List was 
found close to the town covered with newly fallen 



EUROPE, 1831-1846 107 

snow. He had shot himself. The letter to Kolb 
a half-coherent and scarcely legible scrawl 
with many erasures and corrections revealed the 
unhappy man's state: 

11 DEAR KOLB, 

" I have made several attempts to write to my 
family, to my precious wife, to my splendid children, but 
brain, hand, and pen refuse their service. May Heaven give 
them strength ! I hoped that exercise and a short stay in a 
wanner country would fit me again for work, but each day of 
my journey the pains in head and body increased. And then 
the frightful weather ! I turned back to Schwatz but only 
reached Kufstein, where I remained and still remain, lying in 
deep dejection. The blood rushes to my head and all is con- 
fusion, especially in the morning. And the future, if I can 
gain nothing by my pen I shall be forced to live on my wife's 
resources (I have none), and these are not sufficient to provide 
for the children and herself, except with the barest necessaries. 
I am on the brink of despair. God have mercy on those 
belonging to me. Each night of the past four, and to-night 
for the fifth time, I have determined to go to Augsburg, and 
each morning my heart fails me. God will reward you and 
my other friends for all you do for my wife and children. 
Farewell. 

" FR. LIST." 

By the kindly offices of strangers he was buried 
in this secluded corner of the greater Germany on 
behalf of which he had so long and so fervently 
preached the gospel of national unity and com- 
mercial enterprise. When the tragic story of his 
death was known it aroused universal pity, not 



io8 LIFE OF FRIEDRICH LIST 

unmingled with remorse. Practical sympathy was 
not lacking, and it placed his wife and children 
beyond fear of want. In 1848 the Wiirttemberg 
Legislature, which had driven him out in his 
impetuous youth, passed a unanimous resolution 
in his honour. Sixty years after his death a 
stately memorial was raised at Kufstein by con- 
tributions from all parts of Germany and Austria ; 
the base of the statue now bears a simple inscrip- 
tion, which happily touches on two of List's out- 
standing characteristics, a patriotism uncorrupted 
by self-interest and a gift of prophetic foresight 

M Ein Anwalt ohne Sold bemiiht furs Vaterland, 
Ein Kampfer, dem kein Gold den starken Willen band. 
Ein Held, der weit hinaus sah liber seine Zeit, 
Ein Samann, dem als Haus das Sternenwelt bereit." l 

MARTIN GREIF. 

1 "A defender of his country who toiled without reward, a 
warrior over whose strong will gold cast no fetters. A hero who 
saw beyond his own age far into the future, a sower for whom the 
starry world is prepared as a dwelling." 



CHAPTER IV 

CONCLUSION THE ECONOMIC TEACHING OF LIST 

Tin: economic and political situation in Germany 
during List's lifetime presented some obvious 
analogies with that of the United States during 
the first years of its separate existence. In both 
cases there were a number of distinct commercial 
and fiscal entities with more or less political 
independence. The States, however, attained both 
commercial and political union at an early stage 
by the establishment of the federal constitution ; 
while Germany had to build up her Zollverein by 
slow degrees, and did not gain full political unity 
till 1871. But just as the Napoleonic War had 
given an artificial stimulus to some German 
industries at the cost of the German consumer, 
so the continental blockades, Jefferson's Embargo 
of 1807, the Non-Intercourse Act of 1809, and the 
consequent war wit)i England greatly kampered 
the international trade of the United States, raised 
prices, and gave an impulse to home manufactures, 
which were also aided by the withdrawal of capital 
from the hazards of shipping and commerce. In 

109 



no LIFE OF FRIEDRICH LIST 

their subsequent development American manu- 
factures progressed with the rapid growth of popu- 
"v lation as it spread over vast tracts of free land ; 
whereas in Germany the movement for internal 
^free trade long overshadowed the demand for 
protection against foreign competition. Rabbeno 
points out that the older founders of the Zollverein 
worked for " freedom of internal commerce and 
a united customs administration, with a protective 
policy as a subordinate and occasional expedient 
to turn the flank of foreign rivalry." Nebenius 
was himself a theoretical free trader and follower 
of Adam Smith, though he considered that at the 
stage of development which Germany had reached, 
and in view of the customs barriers in other 
countries, a temporary protective tariff might 
foster her " infant " industries. List, in a passage 
x^already quoted, acknowledged in unstinted measure 
his indebtedness as an economist to observation 
of American conditions ; he is silent regarding the 
influence of American writers, but this was no 
doubt also an important factor in his mental 
development. His change of view is clearly shown 
in his published writings. Five years before his 
visit to America he wrote two addresses to the 
Federal Congress on behalf of the Handelsverein 
(1819-20); his "Outlines of American Political 
Economy" appeared in 1827, and in 1837, six years 
after his return to Europe, he wrote, the essay for 



Till-; ECONOMIC TEACHING OF LIST 111 

the French Academy which formed the basis of 
the "National System." In the addresses to the 
Bund he pleads for the abolition of all internal - 
customs, and advocates import duties only as a 
ns of retaliation against foreign countries 
until they shall have "adopted the principle of 
European free trade." But he makes an impor- 
tant reservation as to the universal validity of 
free-trade principles. They are true, he says, in / 
theory and would be true in practice if the world * 
were free trade ; but in the case of a country like 
Germany, surrounded by states which bar out her 
products while flooding her with their own, the 
consequent export of precious metals must weaken 
her, so that it would not necessarily bean economic 
error to shut out the foreign product even if by 
so doing the price were raised to the consumer. 
Thus in 1820, List, although a theoretical free 
trader, favoured the practice of retaliation and had 
doubts as to the validity of free trade for his own 
nation. 

The chief writers on economics whose works 
would come in his way during his residence in 
America were Alexander Hamilton, Thomas 
Cooper, Matthew Carey, and Daniel Raymond. 
Cooper's "Lectures on Political Economy" (1826), 
written with some ability in a spirit of dogmatic 
free trade and individualism, roused all List's 
antagonism, and his own "Letters" of 1827 were 



ii2 LIFE OF FRIEDRICH LIST 

intended to refute this book. He refers to it 
again in the " National System," being especially 
severe on Cooper's description of the word 
" nation " as a mere " grammatical invention." 

Daniel Raymond of Baltimore published in 1820 
"Thoughts on Political Economy," which went 
through four editions in the next twenty years. 
Matthew Carey and other leading Protectionists 
praised the book warmly, since its practical con- 
clusions pointed towards an increased tariff. As 
a matter of fact, it has little value from either a 
literary or scientific standpoint, and its main 
thought the distinction between public and private 
economy is borrowed from earlier writers, Sir 
James Steuart, Lauderdale, and Ganilh. But many 
of Raymond's arguments bear a striking resem- 
blance to those afterwards urged with greater 
ability by List. He attacks Adam Smith on the 
ground that his system is individual, not political, 
economy, for the political economist must regard 
the nation as an organic unity. He rejects Adam 
Smith's theory of value, and his distinction between 
productive and unproductive employments, and 
with them his arguments for free trade, declaring 
that national wealth consists not in commodities 
but in "capacity," which can be best attained by 
the harmonious development of agriculture and 
manufactures within the nation. Hence it is the 
duty of the American Government to take active 



THE ECONOMIC TEACHING OF LIST 113 

steps by means of tariffs and subventions to attain 
the desired end. A careful American student 1 
IMS summed up the question in his statement 
that " Raymond and List hit upon the same 
principles as the basis of their system of political 
economy; that Raymond had given his principles 
to the public some years before List had shown 
evidence of having conceived similar ideas ; and 
that List only gave his system to the world 
after he had had such opportunities for becoming 
acquainted with Raymond's work that it is difficult 
to believe he did not actually have a knowledge 
of it." 

Matthew Carey, father of the more famous 
Henry Carey, was an Irish immigrant, who became 
a leading citizen of Philadelphia and founded there 
a great publishing house. It still survives, after 
various changes, as Lea Brothers and Company. 
Carey, who was strongly anti-English and Pro- 
tectionist, became the moving spirit and President 
of the Pennsylvania Society for the Promotion of 
Manufactures and the Mechanic Arts. In this 
capacity (perhaps also through his friendship with 
Lafayette) he made the acquaintance of List, who 
must almost certainly have known some at least 
of the copious series of pamphlets and addresses 

1 Vide p. 63 in "Daniel Raymond, an Early Chapter in the 
History of Economic Theory in the United States," by Charles 
1'atrick N'cill. Baltimore, 1897. 

I 



114 



LIFE OF FRIEDRICH LIST 



issued by him from the year 1819 onwards. Many 
of them bore the imprimatur of the Pennsylvania 
Society. Some of the arguments with which List 
himself made most play in the " Outlines " and later 
writings are reiterations and adaptations of Carey's 
lively polemics. The enlightened policy by which 
Russia protected her industry, the decline of Spain 
and Portugal, nations which still clung to a system 
of free trade, the fallacies of Adam Smith, and 
the ruin entailed on countries if they/ollowed the 
system of buying in the cheapest market all these 
appear in Carey's pamphlets, and in the pages of 
the Weekly Register published by his friend and 
fellow-worker, Hezekiah Niles of Baltimore. In 
passing, a curious circumstance may be noticed. 
Throughout the tariff controversy' of 1827-28 Niles, 
anxious as he seems to have been to collect 
Protectionist arguments and illustrations from all 
quarters, never once alludes to List, to the " Out- 
lines," to the Harrisburg address, or to the pro- 
jected work on political economy. A short and 
slightly ill-natured notice in 1831 of the Senate's 
refusal to ratify his appointment at Hamburg is 
the only passage in the journal where List's name 
appears. The inference is that such consistent 
silence was intentional, and the German exile had 
not hit it off with the American editor. 

Among the early American writers on economics 
and finance Alexander Hamilton stands first in 



THE ECONOMIC TEACHING OF LIST 115 

chronological order and first, too, in importance. 
The celebrated " Report on Domestic Manufac- 
tures" (1791) had been republished in 1824 by the 
Philadelphia Society, with a preface by Matthew 
Carey. A second edition followed in November, 
1827. The Report is sufficiently well known to 
require only a brief notice here, and must surely 
have been read by List, although he does not 
mention it either in the " Outlines " or in the 
11 National System." In the notes to this edition 
of the former the chief resemblances of thought are 

pointed out. Both the American and the German 

maintain that free tra.de to be beneficial must be 
universal/that manufactures and agriculture benefit 
one another, for the former assures a home market 
to the latter, and quoting Adam Smith the home 
market is the most important of all markets for the 
produce of the soil. They agree that protective - 
duties increase the productive powers of a nation, 
and that the high prices they cause are only tem- 
porary and will be lowered by internal competition. 
Both disapprove of excessive protection, while the 
five conditions which Hamilton requires in the case 
of any article to be protected are stated by List, 
less definitely indeed, but with practical agreement. 1 
The differences are equally marked : Hamilton 
founds his argument on expediency, List mainly 

1 See Letter V. in the "Outlines," and the note quoting 

Hamilton. 



n6 



LIFE OF FRIEDRICH LIST 



on his theory of nationality. Hamilton prefers 
bounties to taxes, and is willing to protect agri- 
culture ; in the " National System " List shows little 
>^favour to bounties and distinctly refuses to admit 
the claim of agriculture to protection. Professor 
Eheberg ascribes the resemblances merely to the 
influence of List's American experiences. "It is 
obvious," he says, "that if List knew Hamilton's 
'Report' he would find in it confirmation of the 
accuracy of his own views ; but he had no occasion 
to borrow Hamilton's ideas, since he had formed 
similar ones before his arrival in America. Be- 
sides, Hamilton could not influence the new theories 
which List added to his old ones in these ' Letters/ 
for they have no similarity to those in his 
' Report.' The beneficial influence exerted on 
List by his stay in America arose from practical 
circumstances, not from printed books." 1 This 
argument would be more convincing if the "similar 
ideas " had appeared in List's writings before he left 
Germany. Eighteen years later, in the preface to 
the " National System," he declared that they arose 
in his mind during his work for the Handelsverein ; 
but as the account of his American and French 
experiences in the same passage contains several 
obvious inaccuracies, too much weight must not be 
given to this assertion. The "new theories," 
again, in the " Letters " have a striking resemblance 
1 Ehebcrg's introduction to the " National System," p. 149. 



THE ECONOMIC TEACHING OF LIST 117 

to those of Carey and Raymond. It is difficult to 
avoid the conclusion that Hamilton, Raymond, and 
Carey had a strong positive, and Cooper a strong 
negative influence upon List's later work. His 
practice of only mentioning other economic writers 
to criticise them accounts for his silence regarding 
the three first-named. Such a conclusion in no 
way affects List's leading merits. V The arguments 
for which Raymond and Carey could only arouse a 
passing interest were clothed by List's eloquence 
with such attraction that for sixty years they have 
been able to sway the policy of nations. X In the 
United States, however, tariff policy underwent 
too many fluctuations to show the influence of a 
consistent theory. The " tariff of abominations" 
marked the highest wave of the first protectionist 
period, and the protests of the South gave weight 
to a free trade movement. The tariff of 1832 was 
intended to keep the protection at a more moderate 
level, but it had to yield in 1833 to the "Com- 
promise," which was largely the work of Henry 
Clay. The Compromise provided for a gradual 
reduction of duties until 1842, and a rapid decline 
in that year to a twenty per cent, average. The 
Whigs who then succeeded to office brought in 
a distinctly protectionist tariff, which was, however, 
modified in 1846. Indeed this tariff is generally 
considered by American historians as free trade, 
although Professor Taussig more reasonably 



n8 LIFE OF FRIEDRICH LIST 

describes its average of twenty-four per cent, as 
moderate protection. It was still further reduced 
in 1857, after which the United States enjoyed 
until 1861 the nearest approach to free trade that 
it has had since 1816. Tariff conditions since 
1 86 1 have been quite exceptional; Professor 
Taussig has shown " how the exigencies of the 
Civil War caused duties to be greatly increased ; 
how these high duties were retained and even 
increased in an unexpected and indefensible way, 
and how the tariff, as it now stands, is still in the 
main the product of war legislation. A history of 
the existing tariff is simply a history of the way in 
which the war duties were retained, increased, and 
systematized, and of the half-hearted attempts at 
reduction which have been made from time to 
time." 1 

The last question which arises in connection 
with America is List's relation, if any, to Henry 
Charles Carey. Professor Gustav Schmoller, in an 
article on Carey, 3 assumed that the "National 
System " was the principal source of Carey's ideas ; 
and Professor Marshall formerly gave some support 
to this view. But in the last edition of his 
' Principles of Economics" (1907) he says only that 
Carey's indebtedness to List is a disputed point. 

1 Taussig, " Tariff History," p. 155, 1889. 
* "Zur Littcraturgeschichte der Staats- und Sozialwissen- 
schaften," 1888. 



THE ECONOMIC TEACHING OF LIST 119 

Mr. Carey-Baird, a grandson of Carey, has dealt 
with the matter in a somewhat vehement pamphlet. 1 
His main arguments against the assumption may 
be briefly summarized. Carey's early books, from 
1835, were free trade. He did not pronounce for 
protection until 1848 in "The Past, the Present, 
and the Future," but none the less his books show 
a harmonious development of principle. The 
working of the tariff of 1842 convinced him of the 
expediency of protection ; but he could not reconcile 
it to economic theory until 1847, when he evolved 
his well-known doctrine of land cultivation and 
rent. " Lying in bed one morning, picturing 
to himself the settlers on the sides of the hills 
moving down into the valleys, and approaching 
each other, as wealth, power, and civilization grew, 
he realized the vital importance of bringing the 
consumer to the side of the producer, and as he 
said to me, 'I jumped out of bed, and, dressing 
myself, was a protectionist from that hour.' " As 
to List, Carey did not know German until 1856, so 
that he did not read the " National System " before 
1851, when Richelot published a French translation. 
Carey's copy of the work, now in the Library of 
the University of Pennsylvania, is little marked, 
and he apparently made small use of it. "A great 
admirer of Frederick List for what he had done in 
building up the German Empire a work without 
1 " Carey and Two of his Recent Critics," 1891. 



120 LIFE OF FRIEDRICH LIST 

which Bismarck, Von Moltke, and William I. 
would never have been heard of in history Carey 
had but a poor opinion of List's ' National System 
of Political Economy/ for the very good reason that 
it lacked just what he had aimed to present in his 
own books . . . broad, deep, and enduring funda- 
mental principles, interlocked and interwoven into 
one grand and harmonious whole, like Carey's 
own great and noble ' Principles of Social Science.' 
Indeed no such voluminous writer as Carey has 
ever lived and written who has paid so little heed 
to the writings of other economists." Mr. Baird's 
piety leads him into some exaggerations, but there 
is no doubt that part of the external evidence goes 
strongly against the influence of List on Carey. 
On the other hand, Carey's ignorance of German 
would not prevent him from reading List's English 
" Outlines," and remembering the father's intimate 
connection with List during the tariff controversy 
of 1827-28, it seems strange that the son (who was 
head of the firm from 1821 to 1835) should not know 
of him until 1851. There are certainly marked 
similarities of argument between Carey's later 
writings and List's "Outlines" and the "National 
System." The late Professor Rabbeno made 
the interesting comment that many of Carey's pro- 
tectionist arguments are far more suited to the 
epoch between 1820 and 1830 (that is, to the period 
covering List's activity in America) than to the 



THE ECONOMIC TEACHING OF LIST 121 

time at which he actually wrote. Points of re- 
semblance (some of these, indeed, may be traced 
back to Hamilton) are, the importance of the home 
market and of a varied development of industry, 
the beneficial influence of manufactures on agricul- 
ture, the idea that nations must pass through four 
stages of economic progress, and a general belief 
in the economic enmity of nations, and especially 
in the oppression of America (or Germany) by 
England. 

There are also minor resemblances : both writers 
are uncritical and unscientific in their treatment of 

A *- 

facets and authorities; both are much dominated by 
existing political conditions. But List stands on 
firmer ground than Carey; he founds himself on 
his doctrine of nationality and productive power, 
while Carey's protectionism is inextricably mingled 
with his theory of value and wages, and his belief 
in economic harmony and in the importance of 
association for industrial progress. He went so 
far as to oppose international copyright, on the 
ground that producers and consumers of books 
ought to live within the same country. In one 
respect he is more logical than List, for he supports 
the taxation of corn and raw materials. Indeed, in his 
view all foreign trade is bad, and the ideal country is 
isolated and self-supporting. At times he seemed 
to agree with List that free trade is the ultimate 
ideal, but unlike List he considered no country yet 



122 LIFE OF FRIEDRICH LIST 

ready for it. Even England, he thought, had injured 
herself and her customers by its adoption. As a 
general rule protection was to him a lasting maxim 
of politics, and although he declared in the preface 
to his " Principles of Social Science " that protec- 
tion would bring about entire free trade, his 
conception of free trade was peculiar to himself. 
" Protection looks to raising the value of labour 
and thus promoting the annexation of individuals 
and the establishment of perfect free trade between 
ourselves and the peoples of Europe, by inducing 
them to transfer themselves to our shores" 

It is in the " National System " that the most 
exhaustive, though perhaps not the final, statement 
of List's ideas is to be found. Soon after its 
publication List was accused by Briiggemann of 
being a mere plagiarist from the romantic re- 
actionary Adam Mailer. They had met at Vienna 
in 1820. But Muller, who seriously proposed to^ 
revert to the economic and politic system of the ' 
Mujdle Ages, could have had little sympathy with 
List's enthusiasm for manufactures and steam 
transport. Knies says of the two men (" Politische 
Oekonomie," p. 194), "they are the forward and 
backward-looking faces of a Janus-bust, their oppo- 
sition to Adam Smith is the line of connection 
between them." On another point List had been 
anticipated. Rau, in his "Studies in Economics" 
(1820), had distinguished four different periods of 



THE ECONOMIC TEACHING OF LIST 123 

national development, which bear a general re- 
semblance to List's four " stages." 

The " National System " as it stands consists of 
a preface, introduction, and four books. Two more 
books were planned, " The Politics of the Future," 
and "The Influence of Political Institutions on 
National Wealth and National Power," but we can 
only guess their general tenor from the essays con- 
tributed by List to the Allgemeinc Zcitung and the 
Zollvcrcinsblatt during the last four years of his life. 
The preface is of importance in the light it throws 
on the author. It professes to give the history of 
his opinions, but the account is not always strictly 
accurate. After a description of his part in the 
foundation of the Handelsverein, and a refutation of 
claims made on behalf of others to be the origina- 
tors of the scheme, he says that it was during his 
two years' work for the society that he conceived 
the distinction between cosmopolitical and national 
economy as well as the theory of productive 
powers. His accounts of his American and French 
experiences have already been summarized. After 
a short apology for the imperfections of his book, 
which he did not wish to delay longer, and an 
expression of gratitude to his friends Kolb and Cotta 
for the opportunities they have granted him for the 
publication of his opinions, he proceeds to refute 
the common report .that he is a mercantilist. He 
has only re-stated the truth in the mercantile 



124 LIFE OF FRIEDRICH LIST 

theory ; for he is an eclectic, and in his book the 
valid arguments of Smith and his school first find 
their proper setting. He has no wish to attack 
living German economists but this restraint is 
atoned for by some sharp, and indeed arrogant, 
criticisms of the dead. Even his former colleague 
Rotteck does not escape, and Nebenius alone (who 
was still living) receives some qualified commenda- 
tion for his work on the Zollverein. German 
economists, however, List says, have this to their 
credit : they have grasped the fact that there is a 
special economy of the nation which they include 
under "Polizeiwissenschaft." In a short digres- 
sion he pauses to lavish unmeasured praise on a 
young student, Alexander von der Marwitz, who 
died prematurely in 1810. On the strength of 
some letters in which the boy of twenty-four 
passed judgment on the " narrowness and tedious- 
ness of Adam Smith," List entitles him Germany's 
greatest political economist. This leads to an 
attack on Adam Smith, who introduced a spirit of 
sophistry, confusion, and hypocrisy into political 
economy, nay, even burned his papers on his death- 
bed for fear lest they should betray his true 
opinions ! This assumption has proved too much 
for later German protectionists, and Dtihring has 
put forward the counter-supposition that Adam 
Smith was an orderly man, and burnt his papers 
merely to save his executor trouble. 






THE ECONOMIC TEACHING OF LIST 125 

The main difference, List continues, between \ 
his teaching and that of the cosmopolitan school 
is the idea of nationality, the nation as a link 
between the individual and mankind In his 
exposition he has had one aim before all others, 
that of making the subject popular. "If the 
theory of political economy is to help national 
interests it must forsake the studies of learned 
men, the lecture-rooms of professors, the cabinets 
of statesmen, and resort to the offices of manu- 
facturers, merchants, and shipowners, the bureaux 
of public servants, the homes of agriculturists, and 
most of all, to the chambers of the legislature. 
In a word, it must become the common property 
of all educated men." With this end in view, he 
had cultivated a simple style, and was shocked 
when a friend, after reading part of the manuscript, 
remarked that it had some " fine passages." " I 
did not want to write fine passages. A fine style 
does not suit national economy. It is no improve- 
ment, but a mistake, for it has often been misused 
to hide unsound or weak logic and to give 
sophistical arguments the force of deep principles." 
Nor has he quoted many authors, although he has 
read widely. He ends with an appeal to the 
German nobility to take to heart the example of 
Kngland, and help in the creation of a Germany 
founded on freedom and national unity. 

The Introduction, which is translated in this 



126 LIFE OF FRIEDRICH LIST 

volume, gives a summary of List's economic belief 
and teaching. Book One, "The History," is based 
upon the essay for the French Academy, and deals 
with the economic development of Italy, the Hanse 
towns, the Netherlands, England, Spain and 
Portugal, France, Germany, and North America. 
The conclusion is (p. 108) 

"History teaches us how nations which Nature has 
endowed with all resources necessary to attain the highest 
^rade of wealth and power, may and must without abandon- 
ing the end in view modify their systems according to the 
measure of their own progress : in the first stage adopting free 
trade with more advanced nations as a means of raising them- 
selves from a state of barbarism, and of making progress in 
agriculture; in the second stage fostering the growth of 
manufactures, fisheries, shipping, and foreign trade by means 
of commercial restrictions ; and in the last stage, when they 
have reached the highest level of wealth and power, gradually 
reverting to the principle of free trade and unrestricted com- 
petition in both home and foreign markets, so that their 
agriculturists, manufacturers, and merchants may be kept from 
indolence and stimulated to retain the supremacy they have 
won. In the first stage, we see Spain, Portugal, and the 
Kingdom of Naples ; in the second, Germany and the United 
States; France seems to be very near the last stage; but 
Great Britain is the only country which has actually reached 
it." 

In the seventeen chapters of the Second Book, 

' The Theory," List labours with much repetition 

to establish a distinction between cosmopolitical 

and political economy, and his theory of productive 



THE ECONOMIC TEACHING OF LIST 127 

>owers is expounded in its relation to the activities 
of the nation. Here occurs the famous attack on 
Adam Smith's definition (carefully limited and 
explained by its author) of "productive labour" 
(p. 128)- 

" The man who rears pigs is thuj a productive, the man 
who teaches men is an unproductive, member of society. He 
who prepares bagpipes or jews-harps for sale is a producer, 
the greatest virtuosos are non-productive, because the har- 
monies they evoke cannot be brought to market. The 
physician who saves the lives of his patients does not belong 
to the class of producers, but the chemist's boy does, although 
the exchange-values (the pills) which he produces may only 
exist for a few minutes before they become valueless. A 
Newton, a Watt, or a Kepler is less productive than an ass, a 
horse, or a plough-ox (labourers who have lately been included 
l>y Mr. McCulloch among the ranks of the productive members 
of society)." 

Book Three, " The Systems," criticizes first the 
Italian economists, represented by Macchiavelli, 
Serra, and Beccaria, then the industrial (List's 
name for the mercantile) system, that of the 
Physiocrats, and the system of " values of ex- 
change " formulated (according to List) by Adam 
Smith, J. B. Say, and "the School." Book Four, 
" The Politics," deals with the malignant influence 
of England's "insular supremacy" on the manu- 
factures of the Continent and North America, 
and with the future commercial policy of the 
Zollverein. 



I2S LIFE OF FRIEDRICH LIST 

\ List's main arguments are, in brief, as follows : 
u/rhe nation is a separate entity whose interests 
are not necessarily the same as those of individuals, 
but to whom individual interests must yield. 
National wealth consists not in the quantity of 
" exchange values " or commodities that a nation 
possesstfe^ut in the development of its productive 
powers^__The highest national well-being demands 
the^egual and harmonious development of agri- 
culture. manufactures, and qojnmerce, which can 
only take place in a state possessing political 
freedom, popular education, and effective means 



oj^ transport^ But only the countries of the 
temperaFe zone are suited to this development, 
while the tropics have a natural monopoly of certain 
products. Hence they become two non-competing 
groups between which exchange can take place. 
Temperate countries, again, all pass through four 
stages of development : pastoral ; agricultural ; 
agricultural and manufacturing ; agricultural, com- 
mercial, and manufacturing. /\ The same economic 
system is not suited to all the stages. In the 
early development of a nation free trade is bene- 
ficial; the exchange of raw materials for manu- 
factures stimulates agriculture and arouses higher 
wants. When the country has begun to manufacture 
for itself the State must provide a suitable system 
of protection under which, shielded from the 
competition of stronger rivals, the industries can 



THE ECONOMIC TEACHING OF LIST 129 

develop. When they have gained sufficient strength 
the protection must be withdrawn, to admit the 
healthy influence of competition. The moral for 
Germany^was the neefl of economic umbn f6T~aTT" 
German states, the extension iof her bonndnngs to 
the sea by way of Belgium LLamburp; r and Austria. 
the establishment of a national marine a"fl "^Hona! 
railway sy^^p, and thn furtherance of industry bv_ 



a moderate andtemporarv 

Neither in Ibrm nor in substance is the book 
scientific List was neither accurate nor con- 
sistent, and in reading his remarks on England or 
on early commercial history it is difficult not to 
feel that his mind was warped, and that he was 
apt to make history to fit and illustrate his theories. 
His account of the results of the Eden Treaty, for 
example, almost reverses the facts; and he is 
always more ready to quote the compilations of 
party writers than to consult the actual statistics 
of trade and commerce. The argument post hoc, 
ergo propter hoc occurs only too often in his pages, 
while his account of English commercial policy is 
curiously perverse. It has been well said by a 
recent writer, 1 " The theory is that ' England ' in 
the eighteenth century was skilfully building up 
equally each of her great national industries by 
vigilant protection. In reality there was not in 
existence any such political organization as List 

1 Mr. J. M. Robertson, "Trade and Tariffs," pp. 49 and 7. 



130 LIFE OF FRIEDRICH LIST 

imagines. There was merely a chronic clamour 
of self-seeking classes in Parliament. . . ." And 
though we can hardly join in the censure of List 
as a deliberate distorter of history, it is impossible 
not to agree that it was a "vain chimera" that 
his mind created when he saw England as "an 
entity with one continuous will and one high 
conception of national interest, 'conscious of destiny 
and sagaciously preparing for freedom by con- 
straint." 

Professor Eheberg, in his learned introduction 
to the seventh German edition, made some moderate 
and valuable criticisms of the chief flaws and limita- 
tions in List's arguments. Professor Nicholson, in 
his Preface to Mr. Lloyd's translation, has met 
most of the attacks upon Adam Smith ; and im- 
mediately upon the appearance of the book, John 
Austin dealt trenchantly with its superficial contra- 
dictions. His answer to List's charge of English 
hypocrisy is still worth quotation. "The en- 
lightened minority which has contended for a 
liberal policy, and the majority which has stuck 
steadily to the wisdom of our ancestors are, 
according to him, one party : and out of the one 
party formed by the confusion of two contending 
parties, he makes a fictitious personage whom he 
calls England. Accordingly England is playing 
the part of a double dealer. She preaches the 
principles of free trade to the other nations of 




TIIK ECONOMIC TEACHING OF LIST 131 

the world and would fain persuade them to take 
her manufactures, but she still means to stick to 
her own restrictive policy, and has not the smallest 
wish for their raw products." 1 Even from this 
brief account it is plain that List's protection is not 
an end, or final state, but a means. It would Q9t 
be necessary but for the conflict of national 
interests and the danger of war. Inverting a 
popular free trade argument, he says that a con- 
dition of perpetual peace would necessarily bring 
with it universal free trade. / Wars have a double 
influence in favpur of protection. They call into 
existence home industries, which on the restoration 
of peace require the support of a tariff (an obvious 
allusion to the long Napoleonic war and the con- 
dition of Germany in 1815), while the constant 
danger of war makes it necessary for each nation 

_^ ^fc ^^^ * * *_ 

to be able to provide itself with the means of 
support. , It is hardly consistent with this last 
argument to find that List rejects the idea of 
protection to agriculture. He certainly under- 
estimated the development of transport, believing 
that many agricultural products (among them 
butter and meat) enjoyed a strong natural pro- 
tection. But the chief arguments in chapter 
seventeen in favour of free imports of food and 
raw materials are, notwithstanding his disclaimers, 
just as applicable to the benefits of free exchange 
1 Edinburgh Review, July, 1842, vol. 75. 



132 LIFE OF FRIEDRICH LIST 

in general. He disapproves of retaliation, "a 
principle which would lead to the most absurd 
and ruinous measures," except in so far as it can 
be used as a means of establishing manufactures 
that is, as protection, not as retaliation proper. 

The most curious example of inconsistency is 
List's view of the proper scale for customs duties. 
In one passage he endorses the general opinion 
that there is a difference between "the case of a 
nation which contemplates passing from a policy 
of free competition to one of protection, and that of 
a nation which proposes to exchange a policy of 
prohibition for one of moderate protection : in the 
former case the duties at first must be low, and be 
gradually increased ; in the latter they must be high 
at first, and be gradually diminished." But within 
a few pages he asserts that " where any technical 
industry cannot be established by means of an 
original protection of forty to sixty per cent., and 
cannot succeed in maintaining itself under a con- 
tinued protection of twenty to thirty per cent, the 
fundamental conditions of manufacturing power are 
lacking." 

With all its faults of temper, inaccuracy, 
wordiness, and repetition, the book has a singular 
charm. The freshness of style and the enthusiasm 
of the writer combine to emphasize its truths, 
while they cast a glamour over its errors. Roscher 
declared that List was not merely the prince of 



133 

journalists, but a great prophet, even if he some- 
times laboured under a false inspiration. As a 
prophet he helped to call into life the Germanl 
railway system and the German Zollverein, and to J 
arouse the spirit of national unity which thirty I 
years after the publication of the " National System^) 
led to the foundation of the Empire. 

This chapter may conclude with a few sentences 
from the eloquent eulogy which Professor Eheberg 
uttered at the unveiling of the Kufstein memorial 
in 1906. " List was fitted as few have been to read 
in the book of the world. He went through life 
with his eyjss ogen for all political and economic 
phenomena, and each impulse he received he 
passed on to others. His intercourse with states- 
men, scholars, merchants, and manufacturers of 
all nations gave breadth, depth, and diversity to his 
knowledge, and continuously influenced by and 
active in the daily affairs of life, he grew to be a 
great economist, a far-sighted politician, a most 
effective and brilliant writer. . . . An important 
society of German merchants informed us that it 
could not subscribe to the statue because, in view 
of the present protectionist tendencies in the 
Empire, the time was inopportune to do honour to 
the champion of protection. One hardly knows 
whether to smile or sigh over such want of under- 
standing. Many circles in Germany and Austria 
connect List's name almost exclusively with the 



134 LIFE OF FRIEDRICH LIST 

struggle for free trade or protection, and rightly 
in so far as List was the first and most important 
advocate of protection. Under his influence, con- 
sciously or unconsciously, Prince Bismarck broke 
with free trade in 1879, and his utterances are still 
the most incisive weapons in the protectionist 
camp. Rightly too, in so far as List realized that 
Germany could receive no economic impulse, make 
/ no economic progress, until she became a united 
commercial territory, and her crushing internal 
tolls were exchanged for the uniform customs 
boundary. No sensible man can blame him for 
wishing to foster the budding German industries, 
crushed as they were by the overwhelming English 
output. But those entirely misunderstand List 
who look on him as a mere protectionist. He was 
never a man of cast-iron views. ' If I had been an 
Englishman/ he said himself, ' I should have been 
a free trader.' He always had before him as the 
goal of his endeavours universal free trade." 






PETITION TO THE FEDERAL 
ASSEMBLY 

OUTLINES OF AMERICAN POLITICAL 
ECONOMY 

AND 

INTRODUCTION TO THE NATIONAL 
SYSTEM 

INTRODUCTORY NOTE 

THE Letters on American Political Economy were 
originally published during the month of July, 
1827, in the Philadelphia National Journal, from 
which they were copied by papers throughout 
the States. They were reprinted at the instance 
of the Pennsylvania Society for the Promotion of 
Manufactures, in two pamphlets, the " Outlines of 
American Political Economy," containing Letters 
I. to VIII. (40 pages), and the "Appendix to the 
Outlines," containing Letters IX. to XI. (13 pages). 
The letters of Jefferson and Madison added by 
the publisher to the first pamphlet deal with the 
general question of the tariff and State rights, but 
have no obvious connection with List's work. 

35 



136 



LIFE OF FRIEDRICH LIST 



His speech is contained in a third pamphlet, 
" Account of the Dinner given to Professor List." 
All three are so scarce as almost to have attained 
the rank of bibliographical curiosities. Two peti- 
tions to the Federal Assembly are reprinted in 
Hausser's selection from List's writings (" Gesam- 
melte Schriften "). One (translated here) is the 
firstfruits of his work for the Handelsverein, written 
at Frankfurt in April, 1819; the other, a part of 
his unwearied activity at Vienna from January to 
May, 1820. 

The introduction to the " National System " 
(published 1841) is the nearest approach List ever 
made to a co-ordinated and complete exposition of 
his theory of economics. 






PETITION ON BEHALF OF THE HANDELS- 
VEREIN TO THE FEDERAL ASSEMBLY, 
APRIL, 1819 

THE humble petition of the German merchants 
and manufacturers, met together at Frankfort-on- 
Main for the Easter Fair of 1819, for the removal 
of all custom-duties and tolls in the interior of 
Germany, and the establishment of a universal 
German system founded on the principle of retalia- 
tion against foreign states. Presented by Professor 
List of Tilbingen as agent for the petitioners. 

Worshipful Federal Assembly, (i) We, the 
undersigned German merchants and manufacturers 
met together at the Fair in Frankfort, approach 
with deep respect this the highest representative 
assembly of the German nation in order to set forth 
the causes of our suffering and to beg for help. In 
a country where it is common knowledge that the 
majority of manufacturers are either entirely ruined 
or drag on a precarious and burdensome existence, 
where the fairs and markets are filled with foreign 
wares, where merchants have almost lost their 
occupation, there is little need of detailed proof to 

13? 



138 LIFE OF FRIEDRICH LIST 

show the intensity of the evil. The ruinous condi- 
tion of German trade and manufactures must be 
due either to individuals or to the conditions of 
society. But who can reproach the German with 
lack of talent or industry ? Is he not proverbial 
for these qualities among all the nations of Europe ? 
Who can deny his enterprise? Did not those 
towns which now serve as the instruments of 
foreign competition once conduct the trade of the 
world? (2) It is only in the faults of the social 
organization that we can find the cause of the evil. 
Rational freedom is the first condition of all 
human development, whether physical or mental. 
As the individual mind is hampered by restrictions 
on the exchange of ideas, so the prosperity of 
nations is impaired by the fetters which are placed 
on the production and exchange of material goods. 
Not until universal, free, and unrestricted com- 
mercial intercourse is established among the nations 
of the world will they reach the highest degree of 
material well-being. If, on the other hand, they 
wish to become irrecoverably weak, then let each 
not only impede, but entirely destroy the import, 
export, and transport of goods by means of prohi- 
bitions, duties, and embargoes. A certain opinion 
has become a dogma among statesmen, although all 
experienced merchants and manufacturers are con- 
vinced of its error. It is that internal industry can 
be created by taxes and dues. 



PETITION TO THE FEDERAL ASSEMBLY 139 

Such imports, on the one hand, act as pre- 
miums for the smuggler who can simultaneously 
defeat the main and the secondary aim of the 
statesman the advancement of home industry and 
the raising of revenue. On the other hand, they 
recoil on the home industry, because the taxed 
country can lay similar restrictions on the products 
of the taxing country. Of course, when the other 
state does not retaliate, but suffers itself to be 
stripped and ruined by prohibitions or high duties, 
then the policy may be advantageous. This is 
the case among our neighbours; encircled by the 
custom barriers of England, France, and Holland, 
Germany can do nothing effective to help the cause 
of universal free trade, by means of which alone 
Europe can reach the highest stage of civilization. 
But the German people impose still narrower 
restrictions upon themselves. Thirty-eight customs 
boundaries cripple inland trade, and produce much 
the same effect as ligatures which prevent the free 
circulation of the blood. The merchant trading 
between Hamburg and Austria, or Berlin and 
Switzerland must traverse ten states, must learn 
ten customs-tariffs, must pay ten successive transit 
dues. Any one who is so unfortunate as to live 
on the boundary-line between three or four states 
spends his days among hostile tax-gatherers and 
custom-house officials; he is a man without a 
country. 



i 4 o LIFE OF FRIEDRICH LIST 

This is a miserable condition of things for men 
of business and merchants. They cast envious 
glances across the Rhine where, from the Channel 
to the Mediterranean, from the Rhine to the 
Pyrenees, from the Dutch to the Italian borders, 
a great nation carries on its trade over free rivers 
and free roads without ever meeting a custom- 
house official. Customs and tolls, like war, can 
only be justified as a means of defence. But the 
smaller the country which imposes a duty, the 
greater is the loss, the more harmful the effect on 
national enterprise, the heavier the cost of collec- 
tion ; for small countries are all boundary. Hence 
our thirty-eight customs boundaries are incompar- 
ably more injurious than a line of custom-houses on 
the external boundary of Germany, even if in the 
latter case the imposts were three times as heavy. 
And so the power of the very nation which in the 
time of the Hansards carried on the world's trade 
under the protection of its own fleet, is now ruined 
by the thirty-eight lines of customs. 

We think that we have brought forward sufficient 
reasons [to prove to your august assembly that 
only the remission of the internal customs, and 
the erection of a general tariff for the whole 
Federation, can restore national trade and industry 
or help the working classes. 

The chief objection generally made to such a 
measure is the expected loss to the revenues of 



PETITION TO THE FEDERAL ASSEMBLY 141 

the individual states. But this objection is easily 
met. 

(1) Up to the present no Government has 
openly affirmed that it imposes dues and customs 
with the single aim of raising money : rather, the 
preambles of most tariffs declare that the duties 
are levied for the promotion of native industry. 
But if we can prove that they are the cause of 
its ruin, then the secondary consideration that 
they are a source of revenue can be no reason for 
their continuance. 

(2) Much of the loss will be covered by the 
revenue from the Federal tariff. The rest could 
much to the advantage of the states as well as of 
the manufacturing and trading interests be raised 
through direct taxes. The Governments will thus 
be saved from a harassing branch of administration, 
and the citizens will gain the considerable amount 
that is now absorbed in cost of collection. 

(3) Looking at the matter from a higher stand- 
point than that of the financier, the advantages 
of removing internal customs appear far more 
important. It is generally recognized that the 
evasion of customs is no longer considered culpable 
even by men of high character. The individual is 
forced into an attitude of war against the tariff, 
and fights it with the weapons of deceit But 
nothing is more prejudicial to national character 
than for Governments to force their subjects, 



142 



LIFE OF FRIEDRICH LIST 



particularly their educated subjects, to break 
accepted moral laws. Nothing is more derogatory 
to the power of the State than to force a part of 
the civil service (the customs officials) into a 
position of hostility towards the public. 

(4) Finally, the nature of the German Federation 
calls for such action as we have proposed. The 
aim of the Federation is to unite the forces and 
interests of all the German peoples for defence 
against enemies from abroad and the promotion 
of national well-being at home, in so far as these 
objects cannot be attained by the separate Govern- 
ments. But it is not only foreign armies which 
endanger national interests foreign tariffs are the 
canker worms which devour German prosperity. 
In our view federal obligations include defence 
not merely through armies but through a tariff. 
A federation of states, like any other society of 
citizens, will remain a mere name if it does not 
found itself upon a community of individual 
interests. Hence we consider the internal dues 
of Germany (which fall as heavily on other German 
states as on the foreigner) to be fetters, and as 
long as they remain they will prevent all national 
prosperity or national patriotism. 

In additionfwe venture to allude to the cause 
of our humble remonstrance, viz. the new Prussian 
tariff. (3) This tariff, we admit, at first sight filled 
us and all Germany with the greatest consternation, 



PETITION TO THE FEDERAL ASSEMBLY 143 

for it seemed directed not so much against French 
and English as against German trade. ) The duties 
are imposed according to weight. But since the 
trade of foreign lands with Prussia is mainly in 
fine goods, while the adjoining states, whose manu- 
factures have been already stunted by English 
competition, sell to Prussia mainly coarse goods 
of considerable weight, it follows that the duty 
paid by foreign countries amounts on the average 
to 6 per cent, while [her German neighbours 
generally pay 25 per cent to 30 per cent, nay, 
even 50 per cent, which is as effective as an 
express prohibition. The transit duties, too, fall 
as heavily on our traders. However, we recovered 
from our consternation when we reflected that by 
the strict maintenance of this tariff law German 
industry would be absolutely ruined, and that it 
is sharply opposed to the spirit of the German 
federation. The Prussian Government, from the 
geographical position of its country, is forced 
beyond all other states to wish for perfect freedom 
of trade in Germany, so we cannot but conclude 
that the tariff aims at compelling the rest of the 
country to adopt this measure. The suspicion 
becomes certainty when we observe that Prussia 
is prepared to make ^separate commercial treaties 
with her neighbours. / 

Your petitioners recognize in this an important 
signal to call their attention to the necessities of 



144 LIFE OF FRIEDRICH LIST 

the situation, and they therefore venture most 
humbly to request the Federal Assembly that (i) 
the inland duties and tolls should be remitted, 
but (2) a tariff system should be established based 
on the principle of retaliation against foreign 
nations, until such time as they too recognize the 
principle of European free trade. Your humble 
petitioners realize that the injurious effects of the 
inland customs on individual states, towns, and 
branches of trade and industry should be explained 
in greater detail. They will, on their return to 
their several homes, undertake this exposition 
with the aid of the general body of merchants 
and manufacturers, and will publish it in due 
course as a supplement. 

We remain, with expressions of the greatest 
loyalty to your honourable assembly. 

[Here follow the signatures of seventy German 
merchants and manufacturers from Saxony, Bavaria, 
Wurttemberg, Electoral Hesse, Baden, Hesse- 
Darmstadt and Nassau.] A large number (4) of 
signatures of merchants and manufacturers in full 
accord with this petition are not yet to hand. The 
pressing need of the occasion forbids us to wait 
for them, and they will be presented later. 

Frankfort, April 14, 1819. 



PETITION TO THE FEDERAL ASSEMBLY U5 



NOTES. 

<37> (0 Federal Assembly. It consisted of delegates from 
the Governments of the various states belonging to the German 
Confederation (founded 1814), under the Presidency of Austria. 
It soon became a mere tool in the hands of the reactionary rulers. 

Page 138. (2) These towns^ i.e. the Hanse towns. 

Page 142. (3) The new Prussian tariff introduced May 26, 1818, 
which abolished internal taxes and established a uniform customs 
boundary. Huskisson said of it (House of Commons, May 7, 
1827), "We are told of the Prussian prohibitions against, and high 
duties on, British merchandise. What are the facts ? First, the 
transit duties in Prussia are very moderate, not exceeding one-half 
per cent. ; secondly, the duties on the internal consumption of 
British goods are what we should consider very low upon 
most articles fluctuating from five to ten per cent. upon no one 
article, I believe, exceeding fifteen per cent. ; and thirdly, there is 
not, in the whole Prussian tariff, a single prohibition. I trust that 
the time will come when we shall be able to say as much for the 
tariff in this country." 

Professor Eheberg, in his introduction to List's " National 
System" (pp. 72, 73), gives a description of the tariff. In the 
" National System," chapter vii., List himself gives it high praise 
for its effect upon Prussian industry. 

Page 144. (4) A large number. List's petition was followed on 
July i, 1819, by one presented on the part of E. W. Arnoldi of 
Gotha, signed by more than 5000 merchants and manufacturers. 



{Original title-pag\ 

OUTLINES 

OF 

AMERICAN POLITICAL ECONOMY 

IN A 

SERIES OF LETTERS 

ADDRESSED BY 

FREDERICK LIST ESQ. 

UATI rBorxssoE or POLITICAL ECONOMY AT THE UNivnsmr or TOBINCEX. 

IN GKRMANT 

TO 

CHARLES J. INGERSOLL ESQ. 

VICE-PRESIDENT or THE PENNSYLVANIA socirrr ron THE PROMOTION or 

MANUFACTURES AND THE MECHANIC ARTS 

TO WHICH IS ADDED 

THE CELEBRATED LETTERS 

OP MR. JEFFERSON TO BENJAMIN AUSTIN, AMD or 
MR. MADISON TO THE EDITORS 

or THE 
LYNCHBURG VIRGINIAN 



PHILADELPHIA 

PRINTED BY SAMUEL PARKER, No. 48, MARKET STREET 

1827 



LETTER I 

Reading, July 10, 1827. 

DEAR SIR, 

Feeling myself honoured by your re- 
quisition, I would not have hesitated a moment to 
comply with it, had I not been prevented by a 
temporary illness. After having recovered, I 
hasten to communicate to you the results of my 
reflections on political economy, produced not 
only by a study of many years, but also by long 
practical exertions in my capacity as a counsellor 
of the Society of German Manufactures, for the 
purpose of obtaining a system of German National 
Economy. 

After having perused the different addresses of 
the Philadelphia Society (i) for the Promotion of 
National Industry, the different speeches delivered 
in Congress on that subject, Ntles' Register, (2) etc. 
etc., it would be but arrogance for me to attempt a 
supply of practical matters, so ingenuously and 
shrewdly illustrated by the first politicians of the 
nation ; I confine my exertions, therefore, solely to 
the refutation of the theory of Adam Smith and 

148 



AMERICAN POLITICAL ECONOMY 149 

Co., the fundamental errors of which have not 
yet been understood so clearly as they ought 
to be. 

It is this theory, sir, which furnishes to the 
opponents of the American System the intellectual 
means of their opposition. It is the combination 
of the soi-disant theorists with those who believe 
themselves interested in the soi-disant free com- 
merce, which gives so much seeming strength to 
the opposite party. Boasting of their imaginary 
superiority in science and knowledge, these dis- 
ciples of Smith and Say are treating every 
defender of common sense like an empiric whose 
mental power and literary acquirements are not 
strong enough to conceive the sublime doctrine of 
their masters. Unfortunately, the founders of this 
dangerous doctrine were men of great minds, 
whose talents enabled them to give their castles 
in the air the appearance of strong, well-founded 
buildings. The important truths they brought to 
light were the unhappy cause which gave to their 
whole system the credit of a doctrine too ele- 
vated to be questioned by future generations. 
This doctrine, sir, was embraced by the greater 
part of those who made politics their particular 
study, and after having admired a doctrine for 
ten or twenty years, found it difficult to divest 
themselves of it. It requires a mind of perfect 
independence to acknowledge that for so long a 



I 5 o LIFE OF FRIEDRICH LIST 

time we gave full credit to an erroneous system, 
particularly if that system is advocated by private 
interests. 

In consequence of this exposition, I believe it 
to be a duty of the General Convention at Harris- 
burg, not only to support the interests of the wool 
growers and wool manufacturers, but to lay the 
axe to the root of the tree, by declaring the system 
of Adam Smith and Co. to be erroneous by 
declaring war against it on the part of the 
American System by inviting literary men to 
uncover its errors, and to write popular lectures 
on the American System and, lastly, by requesting 
the Governments of the different states, as well 
as the general Government, to support the study 
of the American System in the different colleges, 
universities, and literary institutions under their 
auspices. 

The last work of Dr. Cooper (3) shows pretty 
clearly the necessity of such measures on the 
part of the supporters of the American System. 
According to this work (a mere compilation), you 
and I, and all the gentlemen of the convention, and 
all the supporters of the American System, are 
nothing else than idiots; for it is "ignorance to 
support an industry by duties when the com- 
modities may be procured cheaper by foreign 
commerce," " ignorance if a Government guards 
and protects the industry of individuals," etc., etc. 



AMERICAN POLITICAL ECONOMY 151 

(See p. 195, where you find eleven ignorances re- 
corded which you make applicable to yourself by 
going to Harrisburg.) This, sir, is now the only 
elementary work from which our youth and 
people may learn the principle of what is styled 
political economy. What fruit can be expected 
from such seed? And if the supporters of the 
American System are convinced of the superiority 
of their doctrine, is it not their duty to go on 
theoretically as well as practically? Ought they 
not to procure for the people, and especially for 
the youth of their country, elementary works and 
professional teachers, explaining the principles of 
political economy according to their own system, (4) 
which must ultimately prevail in proportion as 
the national legislature becomes convinced of its 
propriety ? 

I remember an anecdote of a physician, who, 
finding his patient consulting a medical work 
about his disease, admonished him to take care 
not to die of an error in print. So, sir, I would 
admonish the people of these United States who 
rely on the celebrated systems of Smith, to take 
care not to die of a beau ideal. Indeed, sir, it 
would sound almost like sarcasm if, in after ages, 
an historian should commemorate the decline of 
this country in the following terms : 

"They were a great people ; they were in every 
respect in the way to become the first people of 



152 LIFE OF FRIEDRICH LIST 

our earth ; but they became weak and died, 
trusting in the infallibility of two books imported 
into the country, one from Scotland, the other 
from France books, the general failure of which 
was shortly afterwards acknowledged by every 
individual." 

As the idea of denouncing in the name of an 
enlightened community that theory of political 
economy would be useless if this denunciation 
cannot be supported by sufficient evidence of its 
failure, I feel it my duty to submit to the examina- 
tion of your superior mind the following views. 
The short space of time and room allowed for 
my communications permit me only to touch on 
the topics of the science. 

In consequence of my researches, I found the 
component parts of political economy to be (i) in- 
dividual economy; (2) national economy; (3) 
economy of mankind. Adam Smith treats of in- 
dividual economy and economy of mankind. He 
teaches how an individual creates, increases, and 
consumes wealth in society with other individuals, 
and how the industry and wealth of mankind in- 
fluence the industry and wealth of the individual. 
He has entirely forgotten what the title of his 
book, "Wealth of Nations," promised to treat. 
Not taking into consideration (5) the different state 
of power, constitution, wants and culture of the 
different nations, his book is a mere treatise on 



AMERICAN POLITICAL ECONOMY 153 

the question : how the economy of the individuals 
and of mankind would stand if the human race 
were not separated into nations, but united by a 
general law and by an equal culture of mind. This 
question he treats quite logically ; and in this sup- 
position his book contains great truths. If the 
whole globe (6) were united by a union like the 
twenty-four States of North America, free trade 
would indeed be quite as natural and beneficial as 
it is now in the union. There would be no reason 
for separating the interests of a certain space of 
land, and of a certain number of human beings, 
from the interests of the whole globe and of the 
whole race. There would be no national interest, 
no national law contrary to the freedom of the 
whole race, no restrictions, no wars. All would 
flow in its natural current. English capital and 
skill, if in superabundance in that island, would 
overflow to the borders of the Seine and Elbe, of 
the Rhine and Tagus ; they would have fertilized 
the woods of Bohemia and Poland long before 
they would flow to the borders of the Ganges and 
of the St Lawrence, and everywhere carry along 
with them freedom and law. An Englishman 
would as readily emigrate to Gallicia and Hungary 
as now a New-Jerseyman emigrates to Missouri 
and Arkansas. No nation would have to fear for 
their independence, power and wealth from the 
measures of other nations. 



I 5 4 LIFE OF FRIEDRICH LIST 

This state of things may be very desirable ; it 
may do honour to the heart of a philosopher to 
wish for it ; it may even lie in the great plan of 
Providence to accomplish it for after ages. But, 
sir, it is not the state of the actual world. Adam 
Smith's system, in the world's present condition, 
goes therefore along with the good Abbe St. 
Pierre's (7) dream of eternal peace, and with the 
systems of those who fancy laws of nations. I 
myself believe it indeed to be a postulate of reason, 
that nations should settle their differences by law 
as now the United States do among themselves. 
War is nothing but a duel between nations, and 
restrictions of free trade are nothing but a war 
between the powers of industry of different nations. 
But what would you think, sir, of a Secretary of 
War, who, embracing the doctrine of the Friends, 
should refuse to build fortresses and men-of-war, 
and to supply military academies, because mankind 
would be happier if there were no war on earth ? 
And yet, sir, the conduct of this Secretary of War 
would be just as wise as the conduct of those who, 
embracing the system of Adam Smith in its pre- 
sent imperfection, leave their national interests to 
the direction of foreign nations and foreign laws, 
because in a more perfect but entirely imaginary 
state of the human race, free trade would be 
beneficial to mankind. (8) I am yet by no means 
of opinion, sir, that Adam Smith's system, in a 



AMERICAN POLITICAL ECONOMY 155 

scientific view, is without its merits. I believe, 
on the contrary, that the fundamental principles 
of the science could only be discovered by his 
researches in the economy of individuals and of 
n.ankind. His error consists in not adding to 
those general principles the modifications caused 
by the fraction of the human race into national 
bodies, and in not adding to the rules the excep- 
tions, or to the extremities the medium member. 
Economy of individuals and economy of mankind, 
as treated by Adam Smith, teach by what means 
an individual creates, increases, and consumes 
wealth in society with other individuals, and how 
the industry and wealth of mankind influence the 
industry and wealth of individuals. National 
economy teaches by what means a certain nation, 
in her particular situation, may direct and regulate 
the economy of individuals, and restrict the 
economy of mankind, (9) either to prevent foreign 
restrictions and foreign power, or to increase the 
productive powers within herself; or, in other 
words, how to create, in absence of a lawful state, 
within the whole globe of the earth, a world in 
itself, in order to grow in power and wealth 
to be one of the most powerful, wealthy, and 
perfect nations of the earth, without restricting 
the economy of individuals and the economy of 
mankind more than the welfare of the people 
permits. 



156 LIFE OF FRIEDRICH LIST 

In my next letter I shall dwell more upon this 
subject For the present remains but space 
enough to request your indulgence on account 
of my inability to express myself correctly and 
eloquently in the language of this country. 

Very respectfully your most humble servant, 

FR. LIST. 



NOTES TO LETTER I 

Title-page 147. Charles Jared Ingersoll (1782-1862) was a 
leading citizen of Pennsylvania. From 1815 to 1829 he was 
United States District Attorney for the State. He took an active 
part in politics, and was appointed Secretary of Legation to Prussia 
in 1837. From 1841 to 1^47 he was a member of Congress, and 
in 1847 was appointed United States Minister to France, but the 
appointment was not ratified by the Senate. 

Page 148. (\) Addresses of the Philadelphia Society. Amongst 
these the Society published in 1824, Alexander Hamilton's 
" Report," edited, with a preface, by Matthew Carey. This 
reached a second edition in 1827. 

Page 148. (2) Mies' Register. Hezekiah Niles (1777-1839) 
founded Niles' Register a Baltimore weekly of which he re- 
mained editor till 1836. " Niles 1 Register, which had said little 
about the tariff before 1819, thereafter became a tireless and 
effective advocate of protection" (Taussig, "Tariff History of the 
United States," p. 70, note). 

Page 150. (3) Dr. Cooper. Thomas Cooper, M.D., LL.D., a 
well-known Republican and man of science ; b. London, 1759 ; d. 
South Carolina, 1839. He was educated at Oxford, studying law 
and medicine. At the time of the Revolution he was sent with 
James Watt by the democratic clubs of England to greet those of 
France. He sided with the Girondists, and his Republican sym- 
pathies brought him into conflict with Burke. A friend of Priestley, 






AMERICAN POLITICAL ECONOMY 157 

he emigrated to America in 1795, an <l landed in Philadelphia, 
afterwards becoming Professor of Chemistry and Political Economy 
in Columbia College, South Carolina. He wrote works on law 
S and political economy. In politics he supported Jefferson, 
Madison, and Monroe, and was an ardent advocate of the claims 
of the South and of " State rights," A speech made by him at 
Charlestown attacking the tariff proposals of 1827-28 attracted 
much attention. The " last work " was " Lectures on the Elements 
of Political Economy" (1826), of which McCulloch said in his 
" Literature of Political Economy," " This work, though not written 
in a very philosophical spirit, is the best of the American works on 
political economy that we have ever met with." 

Page 151. (4) Their own system. List himself acted on these 
principles, both as Professor in Tubingen (1819), and in his con- 
tributions to the Staatslexicon (1833). 

Page 152. (5) Not taking into consideration. This statement 
is far from correct. " The Wealth of Nations " abounds in com- 
parisons and contrasts of different nations, and their different con- 
ditions. See, for example, Book I. chaps, i., v., viii., ix., etc. 

Page 153- (6) // the -whole globe. Cp. Hamilton's " Report on 
Manufactures," p. 26 (ed. of 1825). " If the system of perfect liberty 
to industry and commerce were the prevailing system of nations, 
the arguments which dissuade a country, in the predicament of 
the United States, from the zealous pursuit of manufactures would 
doubtless have great force. ... A free exchange, mutually bene- 
ficial, of the commodities which each was able to supply on the 
best terms might be carried on between them, supporting in full 
vigour the industry of each." 

Page 154. (7) The Abbe St. Pierrt. Charles Re'ne'e Castel, 
Abbe* de St. Pierre (1658-1743), man of science, philosopher, and 
philanthropist, published 1712-1716 a "Projct de Paix Per- 
petuelle." It was praised by Leibnitz and Rousseau, the latter 
writing a critical exposition of the scheme in his edition of the 
Abbe*'s works. 

Page 1 54. (8) Beneficial to mankind. This, of course, overlooks 
the view that it may be beneficial to single nations. Cobden said, 
" It is our policy to receive from every country, and if foreign 
countries exclude us, it is only a stronger reason why we should 
throw open our ports more widely to them" (Dundee, January 16, 
1844). Again, " I remember at the last stage of the Corn Law 
agitation, our opponents were driven to this position, ' Free Trade 



158 LIFE OF FRIEDRICH LIST 

is a very good thing for us, but you cannot have it until other 
countries have it too ; ' and I used to say, ' If Free Trade be a 
good thing for us, we will have it. Let others take it if it be a 
good thing ; if not, let them do without it ' " (January 10, 1849). 

Page 155. (9) Restrict the economy of mankind. Cp. "Con- 
gressional Debates," May 28, 1834, McDuffie. " This idea of a 
conflict between domestic and foreign industry is the lurking 
fallacy which lies at the very foundation of the American system." 



LETTER II 

Reading, July 12, 1827. 
DEAR SIR, 

As soon as the three component parts of 
political economy are revealed, the science is 
brought to light, and the errors of the old theory 
are clear. The object of individual economy is 
merely to obtain the necessities and comforts of 
life. The object of economy of mankind, or to 
express it more properly of cosmopolitical economy, 
is to secure to the whole human race the greatest 
quantity of the necessities and comforts of life. 
An individual living in Pennsylvania, considered 
solely as a part of mankind, has no particular 
interest that wealth and productive powers should 
be increased rather in Vermont, or Maine, than in 
England. If this individual happens to be the 
agent of a foreign manufactory, he may even be 
injured in his livelihood by the growing industry 
of his next neighbours. Nor is mankind interested 
which spot of the earth, or which people excels in 
industry ; it is benefited by every increase of 
industry, and restrictions are as obnoxious to man- 
kind at large, as restrictions of the free intercourse 

59 



160 LIFE OF FRIEDRICH LIST 

between the twenty-four United States would 
be injurious to the wealth and productive powers 
of this nation. The idea of power is neither 
applicable to an individual, nor to the whole human 
race. If the whole globe were to be united by a 
general law, it would not be of any consequence 
to a particular people, as regards its freedom and 
its independence, whether it is strong or weak 
in population, power and wealth ; as it is now, it is 
of no consequence for the State of Delaware, as 
regards her freedom and independence, that her 
wealth, population and territory are ten times 
surpassed by her next neighbours, the State of 
Pennsylvania. 

This, sir, is the theory of Adam Smith and of 
his disciple, Dr. Cooper. Regarding only the two 
extremities of the science they are right. But their 
theory provides neither for peace nor for war, (i) 
neither for particular countries nor for particular 
people ; they do not at all recognize the fracture 
of the human race into nations. In this sense Mr. 
Say (2) censures the Government of his country 
for having employed French ships in carrying 
French military stores from Russia to France, 
whilst the Hollanders would have done it fifteen 
francs per ton cheaper. 

The benefit arising from these shipments for 
our navy, he adds, regards not economy, it regards 
politics! And as disciples are commonly in the 



AMERICAN POLITICAL ECONOMY 161 

habit of surpassing their masters in hardy asser- 
tions, some of our members of Congress asserted 
quite seriously that it would be better to import 
gunpowder from England, if it could be bought 
cheaper there than manufactured here. I wonder 
why they did not propose to burn our men-of-war, 
because it would be better economy to hire, in 
time of war, ships and sailors in England In the 
same sense our American champion of the old 
theory, Mr. Cooper, drops, in his lecture on politi- 
cal economy, the notable sentence : " Politics, it 
must be remembered, are not essentially a part 
of political economy" (see p. 15). What would 
Dr. Cooper, the chemist, think if I should venture 
to say that " Chemistry, it must be remembered, is 
not essentially a part of chemical technology." 

Indeed, so wrong are these adherents of the 
Scot's theory, that in spite of the very name they 
chose to give their science, they will make us 
believe that there is nothing of politics in political 
economy. If their science is properly called politi- 
cal economy, (3) there must be just as much politics 
in it as economy, and if there is no politics in it, the 
science has not got the proper name ; it is then 
nothing else than economy. The truth is that the 
name is right, expressing the very thing these 
gentlemen mean to treat, but the thing they treat 
is not consonant to the name, they do not treat 
political economy, but cosnwpolitical economy. 

M 



162 LIFE OF FRIEDRICH LIST 

To complete the science we must add the 
principles of national economy. The idea of 
national economy arises with the idea of nations. 
A nation is the medium between individuals and 
mankind, a separate society of individuals, who, 
possessing common government, common laws, 
rights, institutions, interests, common history, and 
glory, common defence and security of their rights, 
riches, and lives, constitute one body, free and 
independent, following only the dictates of its 
interests, as regards other independent bodies, and 
possessing power to regulate the interests of the 
individuals, constituting (p. 15) that body, in order 
to create the greatest quantity of common welfare 
in the interior and the greatest quantity of security 
as regards other nations. The object of the 
economy of this body is not only wealth and 
individual and cosmopolitical economy, but power 
and wealth, (4) because national wealth is increased 
and secured by national power, as national power 
is increased and secured by national wealth. Its 
leading principles are therefore not only economical, 
but political (5) too. The individuals may be very 
wealthy ; but if the nation possesses no power to 
protect them, they may lose in one day the wealth 
they gathered during ages, and their rights, free- 
dom, and independence too. On a mere economical 
view, it may be quite indifferent to a Pennsylvanian 
whether the manufacturer who gives him cloth in 



AMERICAN POLITICAL ECONOMY 163 

exchange for wheat lives in Old England or in New 
England ; but in time of war and of restriction, he 
can neither send wheat to England nor import 
cloth from there, whilst the exchange with New 
England would for ever be undisturbed. If the 
manufacturer grows wealthy by this exchange, the 
inhabitant of Old England increases the power of 
his enemy in time of war, whilst the manufacturer 
of New England increases the defence of his nation. 
In time of peace the farmer of Pennsylvania may 
do well in buying English guns and gunpowder to 
shoot game ; but in time of war the Englishman 
will not furnish him with the means to be shot. 

As power secures wealth and wealth increases 
power, so are power and wealth, in equal parts, 
benefited by a harmonious (6) state of agriculture, 
commerce and manufactures within the limits of 
the country. In the absence of this harmony, a 
nation is never powerful and wealthy. (7) A merely 
agricultural state is dependent for its market as 
well as for its supply on foreign laws, on foreign 
good-will or enmity. Manufactures, moreover, 
are the nurses of arts, sciences, and skill, the 
sources of power and wealth. A merely agricul- 
tural people remain always poor (says Say him- 
self) ; and a poor people having not much to sell, 
and less with which to buy, can never possess a 
flourishing commerce, because commerce consists 
in buying and selling. 



164 LIFE OF FRIEDRICH LIST 

Nobody can deny these truths. But it is 
questioned, sir, whether Government has a right 
to restrict individual industry in order to bring to 
harmony the three component parts of national 
industry; and, secondly, it is questioned whether 
Government does well or has it in its power to 
produce this harmony by laws and restrictions. 

Government, sir, has not only the right, but 
it is its duty, to promote everything which may 
increase the wealth and power of the nation, if 
this object cannot be effected by individuals. So 
it is its duty to guard commerce by a navy, because 
the merchants cannot protect themselves ; so it is 
its duty to protect the carrying trade by naviga- 
tion laws, because carrying trade supports naval 
power, as naval power protects carrying trade ; 
so the shipping interest and commerce must be 
supported by breakwaters; agriculture and every 
other industry by turnpikes, bridges, canals, and 
railroads ; (8) new inventions by patent laws ; so 
manufactures must be raised by protecting duties, 
if foreign capital and skill prevent individuals 
from undertaking them. 

In regard to the expediency of protecting 
measures, I observe that it depends entirely 
on the condition of a nation whether they are 
efficacious or not. Nations are as different (9) in 
their conditions as individuals are. There are 
giants and dwarfs, youths and old men, cripples and 



AMERICAN POLITICAL ECONOMY 165 

well-made persons ; some arc superstitious, dull, 
indolent, uninstructed, barbarous ; others are 
enlightened, active, enterprising, and civilized; 
some are slaves, and others are half-slaves, others 
free and self-governed; some are predominant 
over other nations, some independent, and some 
live more or less in a state of dependency. How 
wise men can apply general rules to these different 
bodies, I cannot conceive. I consider so doing no 
wiser than for physicians to prescribe alike to a 
child and a giant ; to the old and young in all cases 
the same diet and the same medicine. 

Protecting duties in Spain (10) would deprive 
the Spanish nation of the trifling industry she yet 
retains. Having no navy, how could she support 
such measures? A dull, indolent, and super- 
stitious people can never derive any advantage 
from them, and no foreigner of a sound mind 
would submit his capital and his life to a brutal 
absolute power. Such a Government can do 
nothing better than translate Dr. Cooper's work in 
order to convince the people that laissez faire and 
laissez passer is the wisest policy on earth. Mexico 
and the southern republics would act with equal 
folly by embracing in their present situation the 
manufacturing system ; a free exchange of their 
raw materials and of the precious metals for 
foreign manufactures is the best policy to raise 
the industry and minds of those people, and to 



166 LIFE OF FRIEDRICH LIST 

grow wealthy. Surely everybody would laugh, 
if either should advise the Switzer to make 
navigation laws, the Turks to make patent laws, 
the Hanse towns to create a navy, and the Hottentot 
or Indians to make railroads. Even the United 
States, after having just converted themselves 
from a colony to an independent nation, did well 
to remain for a while in economical vassalage. 
But after having acquired the strength of a man 
it would be absurd to act as a child, as the 
Scripture says : " When I was a child, I acted as 
a child, but when I became a man I acted as a 
man." 

The condition of this nation cannot be compared 
with the condition of any other nation. The same 
kind of government and same structure of society 
were never seen before; nor such general and 
equal distribution of property, of instruction, of 
industry, of power and wealth ; nor similar accom- 
plishments in the gifts of nature, bestowing upon 
this people natural riches and advantages of the 
north, of the south, and of the temperate climates, 
all the advantages of vast seashores and of an 
immense unsettled continent, and all the activity 
and vigour of youth and freedom. There is no 
people, nor was there ever a people, doubling their 
number every twenty-five years, doubling the 
number of their states in fifty years, excelling in 
such a degree of industry, skill, and power, creating 



AMERICAN POLITICAL ECONOMY 167 

a navy in a few years, and completing in a short 
time public improvements which, in former times, 
would alone have distinguished a nation for ever. 

As the condition of this nation is unexampled, 
the effects of her efforts to raise manufactures 
will be without example ; while minor states 
must submit to the English naval ascendency, 
the Americans can raise their heads and look it 
full in the face. If poor, uninstructed, indolent 
and depressed people cannot rise by their own 
efforts, this free, enterprising, instructed, indus- 
trious, and wealthy people may. If other people 
must restrict their ambition to live in a tolerable 
dependence and economical vassalage, this nation 
would do injustice to the call of nature if it should 
not look up to full independence, (i i) if it should not 
aspire to an unexampled degree of power to pre- 
serve its unexampled degree of freedom and happi- 
ness. But a high degree of power and wealth, a 
full independence, is never to be acquired, if the 
manufactured industry is not brought into harmony 
with agricultural and commercial industry. Govern- 
ment would therefore not only do well in support- 
ing this industry, but wrong in not doing it. 

American national economy, according to the 
different conditions of the nations, is quite different 
from English national economy. English national 
economy has for its object to manufacture for the 
whole world, to monopolize all manufacturing 



168 LIFE OF FRIEDRICH LIST 

power, even at the expense of the lives of her 
citizens, to keep the world, and especially her own 
colonies, in a state of infancy and vassalage by 
political management as well as by the superiority 
of her capital, her skill, and her navy. American 
economy has for its object to bring into harmony 
the three branches of industry without which no 
national industry can attain perfection. It has for 
its object to supply its own wants by its own 
materials and its own industry; to people an un- 
settled country; to attract foreign population for 
capital and skill; to increase its power and its 
means of defence in order to secure the indepen- 
dence and the future growth of the nation. It has 
for its object, lastly, to be free and independent (12) 
and powerful, and to let every one else enjoy free- 
dom, power, and wealth as he pleases. English 
national economy is predominant; American national 
economy aspires only to become independent. As 
there is no similarity in the two systems, there is 
no similarity in the consequences of it. The 
country will not be overstocked with worthless 
goods any more than it is now overstocked with 
cabinet ware; the manufactories will not produce 
vice, because every labourer can earn enough to 
support his family honestly ; nobody will suffer or 
starve from want of labour ; therefore if the labourer 
cannot earn enough to support his family other- 
wise, he can cultivate the earth. There is yet room 



AMERICAN POLITICAL ECONOMY 169 

enough for hundreds of millions to become in- 
dependent farmers. 

After having explained the fundamental error 
of Smith and Say in confounding cosmopolitical 
economy with political economy, I shall attempt to 
demonstrate in my next letter by what errors both 
of these celebrated authors have been induced to 
assert that a nation's wealth and industry cannot 
be increased by restriction. 

Very respectfully, your most humble and 
obedient servant, 

FR. LIST. 



NOTES TO LETTER II 

Page 160. (i) Neither for peace nor for war. The whole 
argument of this letter rests upon the assumption of the necessity 
of war. 

Page 160. (2) Mr. Say. In his " Principes d'Economie politique," 
I. chap, ix., he takes the instance of hemp, and does not call it a 
military store. He adds, " It is hardly necessary to caution the 
reader that I have throughout been considering maritime industry 
solely in its relation to national wealth. Its influence upon national 
security is another thing." 

Page 160, (3) If their science is properly called political 
economy. The modern tendency is to call it rather economics. 
" From whatever point of view we look at it, political economy is 
best described as a social science ; and if a distinction is drawn 
between social and political science, it must, notwithstanding its 
name, be regarded as belonging to the former, and not to the latter 
category" (Keyne's "Scope and Methods of Political Economy," 
P- 90- 



i;o LIFE OF FRIEDRICH LIST 

Page 162. (4) Power and wealth. "National System," Book 
II. chap. xii. "The power of producing wealth is infinitely more 
important than wealth itself," and many other passages. 

Page 162. (5) Political. Hamilton, "Report," p. 20. "The 
substitution of foreign for domestic manufactures is a transfer to 
foreign nations of the advantages accruing from the use of machinery 
in the modes in which it is capable of being employed with most 
utility, and to the greatest extent. 

Page 163. (6) Harmonious. This idea is developed in the 
" National System," Book II. chaps, xiii., xvii., xx. "The agricul- 
tural power of production is so much greater the more intimately 
a manufacturing power, developed in all its branches, is united 
locally, commercially and politically with agriculture. . . . We 
call this relation the balance or harmony of the productive powers " 
(chap. xiii.). 

Page 163. (7) Hamilton "Report," p. 20. " The mere separation 
of the occupation of the cultivator from that of the artificer, has the 
effect of augmenting the productive powers of labour, and with them 
the total mass of the produce or revenue of a country. 

Page 164. (8) List does not consider whether any of these results 
can be attained by voluntary effort. 

Page 164. (9) Nations are as different. Cp. " National System," 
II. chap. xv. " An infinite difference exists in the conditions and 
circumstances of the various nations: we observe among them 
giants and dwarfs, well-formed bodies and cripples, half-civilized 
and barbarous peoples : but in all of them, as in the individual 
human being, exists the impulse of self-preservation, the striving 
for improvement which is implanted by nature. It is the task of 
politics to civilize the barbarous nationalities, to make the small 
and weak ones great and strong, but above all to secure to 
them existence and continuance. It is the task of national 
economy to accomplish the economical development of the nation, 
and to prepare it for admission into the universal society of the 
future." 

Page 165. (10) Spain. Yet in the " National System," I. chap. v. 
List maintains that the protective system in vogue in Spain during 
the eighteenth century under Bourbon rule greatly promoted the 
development of Spanish manufactures. 

Page 167. (n) Independence. Cp. Hamilton, " Report," p. 46. 
" Not only the wealth, but the independence and security of a 
country appear to be materially connected with the prosperity of 



AMERICAN POLITICAL ECONOMY 171 

manufactures. Every nation with a view to these great objects 
on.,'ht to endeavour to possess within itself all the essentials of a 
national supply. These comprise the means of subsistence, habi- 
tation, clothing, and defence. 

Page 168. (12) Irukptndtnt. On this theory, List would now 
advocate free trade for America. 



LETTER III 

Reading, July 15, 1827. 

DEAR SIR, 

The system of Adam Smith has assumed 
so great an authority that those who venture to 
oppose it, or even to question its infallibility, 
expose themselves to be called idiots. Mr. Say, 
throughout his whole work, is in the habit of 
calling all objections to his sublime theory the 
opinion of the rabble, vulgar views, etc., etc. 
Mr. Cooper on his part, probably finding it not 
quite proper to speak in this country as much as 
the Parisian about rabble population, etc., uses the 
term " ignorance." He regrets very much that both 
the Pitts, as well as Mr. Fox, were such block- 
heads as not to conceive even the fundamental 
principle of the sublime theory. These infallible 
theorists assure us, as gravely as modestly, that 
minds like those of Edward III., Elizabeth, Col- 
bert, Turgot, Frederick II., Joseph II., Pitt, (i) 
Fox, Napoleon Bonaparte, Washington, Jefferson, 
Hamilton, a chart of the minds of the most 
enlightened men of all ages, were not enlightened 

172 



AMERICAN POLITICAL ECONOMY 173 

enough to comprehend the true principles of 
political economy. Though, therefore, an oppo- 
nent of Mr. Say finds himself in tolerable good 
company amongst the ignorant, yet I consider it 
necessary to state that, during many years I was 
not only a very faithful disciple of Smith and Say, 
but a very zealous teacher of the infallible doctrine ; 
that I not only studied the works of the masters, 
but also those of their ablest disciples in England, 
Germany, and France, with some assiduity and 
perseverance, and that I did not become a convert 
till arrived at the age of maturity. I saw then in 
my native country the admirable effects of what is 
called the continental system and the destroying 
effects of the return of what they call trade after 
the downfall of Napoleon. German industry, though 
fostered but partially by the continental system, 
because enjoying protection only against English 
competition and remaining exposed to French 
competition, whilst the borders of France were 
closed to it, made admirable progress during that 
time, not only in the different branches of manu- 
factured industry, but in all branches of agriculture, 
which, though labouring under all the disadvan- 
tages of the wars and of French despotic measures, 
were flourishing. All kinds of produce were 
in demand and bore high prices, and wages, 
rents, interest of capital, prices of land, and of 
every description of property were consequently 



174 



LIFE OF FRIEDRICH LIST 



enhanced. But after the downfall of the continental 
system, after having acquired the enjoyment of 
English goods a great deal cheaper than the 
nation could manufacture them, the manufactures 
languished. The agriculturists and noble land 
proprietors were at first much pleased to purchase 
at so low a price, particularly the wool growers 
who sold their wool to England at very high 
prices. The principles of Smith and Say were 
highly talked of. But the English, after having 
acquired the German market for their manufactures, 
did not hesitate to foster their landed interests 
too by corn and woollen bills ; the price of wool 
and grain, and in consequence rents, wages, and 
property in Germany sunk more and more, and the 
most ruinous effects followed. At the present day 
agricultural produce is three or four times cheaper 
there than under the continental system, and 
property has scarcely any price at all. The wool 
grower and agriculturist, as well as the manufac- 
turers, are ruined, and under present circumstance 
they are not able to procure a third part of the 
quantity of cheap English goods that they enjoyed 
formerly of the higher priced domestic manufac- 
tures. The contemplation of these effects induced 
me first to doubt of the infallibility of the old 
theory. My eyes being not sharp enough to dis- 
cover at a glance the errors of a system so 
ingeniously built up and supported by so many 



AMERICAN POLITICAL ECONOMY 175 

valuable truths, I judged the tree by its fruit. I 
conceived that, as a theory in medicine, however 
ingeniously invented, and however supported by 
brilliant truths, must be fundamentally erroneous 
if it destroys the life of its followers, so a system 
of political economy must be wrong if it effects 
just the contrary of that which every man of 
common sense must be supposed to expect from 
it. In consequence of this conviction I came out 
openly against the followers of this theory, and so 
popular was this opposition that in a few weeks a 
society of many thousands of first-rate manufac- 
turers, merchants, etc., dispersed throughout the 
whole ancient German Empire, was founded, for 
the purpose of establishing a system of German 
national economy. Elected their counsellor 1 
visited, accompanied by deputies of the society, 
the different courts of Germany (and the Congress 
of German Ministers held at Vienna in 1820) in order 
to induce the several Governments of the necessity 
of such a system. All people, in the interior, were 
convinced at last of this necessity, agriculturists, 
wool growers, proprietors of estates, as well as 
manufacturers. No opposition was heard any- 
where, except in the Hanse towns and in the city 
of Leipzig, and even there none but the agents of 
English firms and the bankers, whose momentary 
interests were at stake, took part in this oppo- 
sition. These adversaries of the common welfare 



176 LIFE OF FRIEDRICH LIST 

were headed and supported by a few learned 
disciples of Smith and Say, who, either offended 
in their literary pride by the opposition against a 
theory, the development and illustration of which 
formed their literary renown, or bound by personal 
interests and by their situation, still rode on the 
old hobby-horse of free trade, and harped upon 
its beneficial effects, whilst free intercourse was 
checked in every possible way by foreign restric- 
tions. The most enlightened theorists of the 
interior, on the contrary, gave way to the prin- 
ciples of the society, and many of them (particu- 
larly Count Soden, (2) the most celebrated German 
author in political economy) contributed much 
valuable matter for a weekly journal (3) I edited at 
that time in order to prepare the public mind for 
a national system. All the German Governments 
of the second and third rank (except Hanover and 
the Hanse towns) were at last convinced of its 
necessity, and a preliminary treaty adapted to the 
interests of the nation was concluded in 1820 at 
Vienna. If this treaty is not carried into effect 
even now,;it is only to be ascribed to the diffi- 
culties of executing such a treaty amongst different 
states, each independent of the other and not 
enjoying the advantages of a general legislature 
for their common interests. But if rumour speaks 
truth, the present King of Bavaria, a ruler who 
excels as much by his enlightened views and 



AMERICAN POLITICAL ECONOMY 177 

strength of character as by his liberal sentiments 
towards the welfare of the whole German nation, 
will soon overcome those difficulties. Being in 
duty bound during several years (4) to contend 
every day against the disciples of Smith and Say, 
all parts of the old theory were at last revealed by 
these exertions, and that perseverance and circum- 
stances effected what humble talents never would 
have performed. 

I trouble you, sir, by this long apology in order 
to excuse myself for having undertaken with such 
humble means so great a task as the refutation of 
the literary productions of the most celebrated 
men in political economy. I travelled in the same 
way which the patriots of the United States did, 
and in which even Say found a powerful opponent 
in his countryman, the Count Chaptal, (5) a chemist 
and statesman, who by his researches in chemistry 
as well as by his political exertions did more for 
the promotion of the industry of France than even 
one man did in any other country. Read, I request, 
Chapter XV. (vol. i.) of his celebrated work, 
"de 1'Industrie Francaise" (1819), and you will find 
there a most practical and material refutation of 
Say's theory, though he appears not to oppose him 
directly. 

1 hope the authority of men like Chaptal will, 
even in the minds of those who are in the habit 
of giving more credit to names than to argument, 

N 



i;8 LIFE OF FRIEDRICH LIST 

be some excuse to me for having undertaken this 
task, and perhaps some inducement to others to 
enter into an impartial investigation of these argu- 
ments. For those who are in the habit of alleging 
the late wonderful conversion of the English 
Ministry to the system of Smith and Say, in order 
to prove its all-conquering and irresistible power, 
I only state here the results of my reflections, 
reserving to myself to treat in another letter upon 
that interesting subject, and upon the English 
national economy generally. These results are : 
that the seeming adherence of Messrs. Canning and 
Huskisson (6) to Messrs. Say and Smith's theory, is 
one of the most extraordinary of first-rate political 
manoeuvres that have ever been played upon the 
credulity of the world. These gentlemen, with 
cosmopolitical principles on their lips, design to 
persuade all other Powers to cede their political 
power in order to render England's productive and 
political power omnipotent. Mr. Canning went to 
Paris (7) with Mr. Say's treatise in his hands, show- 
ing to M. de Villele (8) the chapters according to 
which it would be most beneficial to mankind if he, 
Mr. Villele, would place the whole French manu- 
factural interests at his, Mr. Canning's, mercy, for 
the benefit of importing wines and spirits into the 
British Empire. Now, sir, what would have been 
the consequence, or what will be the consequence, 
if the French minister were complaisant enough to 



AMERICAN POLITICAL ECONOMY 179 

become a second time the dupe of Mr. Canning? 
The French manufactories, and with them the 
French manufacturing skill and power, would un- 
doubtedly be destroyed in a few years. It is true 
the French would sell, and therefore produce and 
manufacture, a great deal more of wines and spirits 
than they did before. But, sir, will it not after- 
wards lie in the power of Mr. Canning, or of any 
other succeeding Premier of England, to destroy 
this wine market in one hour? And if destroyed, 
either by a restrictive law or by an open war, 
can the French then take up their manufactural 
power in the same hour in which the English 
are destroying their wine-markets ? No, sir ; it 
would take ages and hundreds of millions to build 
it up again. Would, in consequence of this, France, 
from the day of the agreement of the treaty, not 
feel herself as dependent upon England, as Portu- 
gal feels since the day of the celebrated treaty 
of Mr. Methuen, in 1703, with the agreement of 
which she converted her condition as an inde- 
pendent state into the condition of being the vine- 
yard and province of England? It is even very 
likely Mr. Villele would learn after a short time 
from the Courier of London, that Mr. Canning had 
made a speech in Parliament, containing a boast 
that Mr. Villele had been duped by him in so 
vital a question, as was the case last year respect- 
ing his political course in regard to the occupation 



i8o LIFE OF FRIEDRICH LIST 

of Spain by French troops. These two cases are, 
indeed, admirably parallel. When Spain was about 
to be invaded by French troops, Mr. Canning, 
adverting to the law of nation, said, it was against 
those laws for England to interfere in this affair; 
but last year, in a fit of self-praise, asserted freely 
in open Parliament, (9) that he had played a trick 
upon the French Government, by engaging it in 
Spain, charging it with the occupation of that 
country, and by weakening and paralyzing thereby 
its power, by that trick enabling himself to call 
the Republics of South America into existence, and 
to open an immense market to the English manu- 
factories. Well done, Mr. Canning, but after having 
revealed the true motives of your respect for the 
law of nation, will not every man of common sense, 
and, I hope, Mr. Villele too, divine the true motives 
of your respect for the principles of cosmopolitical 
economy ? It is not very cunning, indeed, to boast 
publicly of having duped those whom we wish to 
dupe again, as the only profit a man can derive 
from having been duped is to learn not to be 
duped a second time; and I would consider this, 
on the part of Mr. Villele, by far a better plan 
than to request Mr. Canning to alter his speech, 
and to make it different from what it was in its 
delivery. 

I hope to have said enough on the subject to 
prevent every American citizen from participating 



AMERICAN POLITICAL ECONOMY 181 

in the enthusiasm of President Cooper, when allud- 
ing to the wonderful conversion of Messrs. Canning 
and Huskisson. Indeed, there is no event which 
could do more essential injury to the glory of Mr. 
Say and of his system than the carrying of the same 
into practice by the cunning of Mr. Canning. I am 
sure the history of his country would not transmit 
his name as a public benefactor, convinced as I am 
that free trade with England, in the present state 
of things, would do more injury to the inde- 
pendence of France than the two invasions of the 
Holy Alliance. 

Before I enter again into the matter itself, I 
must make some further observations to show how 
it was possible that this theory could assume such 
a degree of authority over the learned men of all 
nations. Mr. Smith brought many a valuable 
truth to light, never before acknowledged, and his 
work contains many beauties on detached matters, 
which are written with superior talent, sagacity, 
and experience. These merits were the more 
creditable to his system as it was the only sub- 
stitute for the system of the economists, the 
failure and weakness of which was acknowledged 
by mankind. The literary world wanted a system 
of political economy, and Mr. Smith's was the best 
extant Dictated by a spirit of cosmopolitism, it 
was laid hold of by the age of cosmopolitism, 
in which it made its appearance. Freedom 



182 LIFE OF FRIEDRICH LIST 

throughout the whole globe, eternal peace, rights 
of nature, union of the whole human family, etc., 
were the favourite subjects of the philosophers 
and philanthropists. Freedom of trade through- 
out the whole globe was in full harmony with 
those doctrines. Hence the success of Smith's 
theory. It moreover afforded a fine consolation 
to the weaker nations. Not having power enough to 
support a national system, they made an appeal to 
the beloved system of free trade, as they appealed 
to Grotius and Vattel, to Puffendorff and Martens, 
if they had not strength to defend themselves by 
the argument of the bayonet. It was, lastly, a 
very easy task to enter into its mysteries; they 
could be delineated in some few phrases : " Re- 
move the restrictions from industry make it free 
let it alone." After these precepts were given, 
it required neither great talents nor great exer- 
tions, nor much practice, to act the part of a very 
wise statesman. You had nothing else to do but 
to let everything go as it pleased to let every- 
thing alone for being numbered amongst the 
most wise and most learned men upon earth. 
That is an easy task indeed. For such a system 
of passive regulations the great men of England 
could have no taste, as Mr. Fox confessed in 
Parliament; being unwilling to let things go as 
they would, and to let everything alone: those 
men intended to raise their country in wealth and 



AMERICAN POLITICAL ECONOMY 183 

power, by their political measures, beyond all 
reach of competition by other nations. 

And if in our days the great men of England 
affect to embrace the system of Adam Smith (by 
parliamentary speeches (10) only, not by facts), 
they do nothing else than Napoleon would have 
done if he, in the midst of his glory and of his 
power, should have proposed to the nations of 
the earth the disbanding of their armies and the 
dismantling of their fleets, in order to live in 
general peace together as brothers and friends, 
who could have no interest in slaying and murder- 
ing each other, and in injuring the general welfare 
by keeping up, at heavy expense, the means 
of war. 

But the world has advanced wonderfully in 
experience and intelligence since the time of Adam 
Smith. Between him and us lie the American and 
French revolutions the English omnipotence on 
the sea and the French omnipotence on the 
European continent, the restoration of the old 
Government in France, the Holy Alliance, and the 
emancipation of the South American republics. 
A new people, with a new form of government and 
new ideas of general welfare and freedom, has 
arisen. This people has learned by a general and 
free discussion of every political matter, to dis- 
tinguish the true from the false, visionary system 
from clear perceptions, cosmopolitical from political 



i8 4 LIFE OF FRIEDRICH LIST 

principles, sayings from doings. This people 
cannot be accused of selfishness if it intends to 
rise by its own exertions to the highest degree of 
power and wealth without injuring other nations, 
but likewise without taking upon themselves the 
charge of promoting the welfare of mankind, 
because if it should not pursue that policy its 
standing amongst the powerful nations of the 
earth, and its whole system of society, would be 
lost. Napoleon would have been very willing 
to charge himself with the trouble of uniting the 
whole surface of the earth, and to procure to the 
human race the blessings of a general free inter- 
course, but the English, it seems, did not like the 
prospects of such a general happiness. So the 
Americans, I suppose, would never like to ex- 
change their national independence and power for 
a general law of nations founded upon English 
power they would not like the prospect. 

It seems, therefore, cosmopolitical institutions, 
like those of free trade, are not yet ripe for being 
introduced into practice. First, it must be decided 
whether the social system of Napoleon, or that of 
England, or that of the United States will pre- 
vail on earth. Several centuries may yet elapse 
before this decision is effected, and those who 
act seriously as if it were really effected may be 
very honest, very high-minded men, but they are 
short-sighted politicians. Desiring to serve the 



AMERICAN POLITICAL ECONOMY 185 

cause of humanity they ruin their country. History 
will censure them for having separated national 
economical views from national political views, as 
it censures Poland for having sold her indepen- 
dence and power for the benefit of selling wine, 
as it laughs at Esau for having 'sold his primo- 
genitive birthright for a mess of pottage rather 
than to rely on his own power for procuring the 
means of existence. 

After this long digression I shall re-enter into 
the matter itself in my next letter. 

I am most respectfully, 

Your obedient servant, 

FR. LIST. 



NOTES TO LETTER III 

Page 172. (i) Turgot and Pitt. The one a friend, the other 
(as he called himself) a " scholar " of Adam Smith, appear oddly 
enough in this catalogue. 

Page 176. (2) SocUn. Friedrich Julius Heinrich, Reichsgraf 
von Soden (1754-1831). A Prussian official till 1796, when he 
retired owing to a disagreement with the Government. He took 
up the study of Political Economy at the desire of Karl Friedrich 
of Baden. His " National- Oekonoraie," 9 vols., 1805-1824, arose 
out of a review of the "Wealth of Nations." In the main he 
accepts Smith's theories, but he does not always state them 
correctly. Though he condemns mercantilism, prohibition, and 
high duties, he is not an unconditional free trader. He disparages 
the form of the " Wealth of Nations," and considers Smith " narrow 
and insular." 

Page 176. (3) A -weekly journal. Organ fur den deutscke* 
Jlandels- *nd Gcwerbesstand. 



186 



LIFE OF FRIEDRICH LIST 



Page 177. (4) Several years. But List's activity as Consulent 
lasted only from April, 1819, to July, 1820. 

Page 177. (5) Count ChaptaL Jean- Ant oine, comte de Chante- 
loup (1756-1832). A famous French chemist and follower of 
Lavoisier. During the Revolution he was a Girondist, but became 
Minister of the Interior under the First Consul. 

Page 178. (6) Messrs. Canning and Huskisson. The charge 
is amplified in the " National System," I. chap, vi., note, and IV. 
chap, xxxiii. 

Page 178. (7) Paris. His second visit in 1827 is meant here. 

Page 178. (8) Vitlele. Comte de (1773-1854). The leader of 
the French Ministry, 1821. 

Page 1 80. (9) In open Parliament. An allusion to the famous 
speech of December 12, 1826, in which Canning exclaimed, " I 
called the New World into existence to redress the balance of the 
Old." It is curious that List's version is much closer to the mis- 
quotations of Lord Grey in the House of Lords Debate, May 6, 
1827, than to Canning's actual speech. Canning said, " The House 
knows the country knows that when the French army was on the 
point of entering Spain, His Majesty's Government did all in their 
power to prevent it ; that we resisted by all means short of 
war. ... If France occupied Spain, was it necessary in order to 
avoid the consequences of that occupation that we should blockade 
Cadiz ? " Earl Grey said, he " found in the speech published by 
Mr. Canning that he had connived at the invasion of Spain by 
France," and quoted it as, " If I allowed France to occupy Spain, 
was it necessary that we should blockade Cadiz ?" (" Political Life 
of Canning," by Stapleton, vol. iii. pp. 401-8). 

Page 783. (10) Parliamentary speeches. Canning, in his Budget 
Speech, June i, 1827, after pledging himself to reform, quoted a 
speech of Pitt in 1792, "in which that great man speaks of Adam 
Smith as an author whose writings from his extensive knowledge 
of detail, and depth of philosophical research, furnished the best 
solution to every question connected with the history of commerce. 
Sir, we hear often nowadays that the application of philosophy to 
the affairs of trade is an innovation. I, however, am content to go 
back to the year 1792, and to take the words that I have now 
quoted into my mouth, words which were then used by Mr. Pitt, 
which I have treasured up in my mind, and to adopt them as 
the guide and pole-star of my own policy." 



LETTER IV 

Reading, July 18, 1827. 

DEAR SIR, 

In re-entering into the matter itself, I 
am disposed to assail at first the main pillars of 
the system of Messrs. Smith and Say, leaving the 
task of attacking less essential points to those who 
feel indisposed to overthrow the whole building. 

As these theorists confounded cosmopolitical 
principles with political principles, so they entirely 
misapprehended the object of political economy. 
This object is not to gain matter in exchanging 
matter for matter as it is in individual and cosmo- 
political economy, and particularly in the trade of 
a merchant. But it is to gain productive and political 
poiccr by means of exchange with other nations, 
or to prevent the depression of productive and 
political power, by restricting that exchange. They 
treat, therefore, principally of the effects of the 
exchange of matter instead of treating of productive 
power. And as they made not the productive 
power, and the causes of its rise and fall in a 
nation, the principal object of their inquiry, they 

187 



i88 LIFE OF FRIEDRICH LIST 

neither appreciated the true effect of the different 
component parts of productive power nor the true 
effect of the exchange of matter, nor of the con- 
sumption of it. They called the existing stock of 
matter produced by human industry by the general 
name of capital, and ascribed to the different com- 
ponent parts of this stock not only a common and 
equal, but an omnipotent effect. The industry of a 
people is, according to them, restricted to the 
amount of capital, or stock of produced matter; 
they did not consider that the productiveness of 
this capital depends upon the means afforded by 
nature, and upon the intelligence and social con- 
ditions of a nation. It will be shown hereafter 
that if the science required for the existing stock 
of produced matter the general term of capital, it 
is equally necessary to create for the existing 
stock of natural means, as well as for the existing 
state of social and intellectual conditions, a general 
term : in other words, there are a capital of nature, 
a capital of mind, and a capital of productive matter, 
and the productive powers of a nation depend not 
only upon the latter, but also and principally upon 
the two former. 

I cannot expect that any man will be able to 
comprehend, by this short exposition, the principles 
of the new system, or the failure of the old theory. 
They require a scientific development. But as 
these letters are principally destined to elucidate 



AMERICAN POLITICAL ECONOMY 189 

a practical question, I will attempt first to show 
the correctness of my ideas in applying them to 
subject of the woollen and cotton trade 
between the United States and Great Britain. 

Suppose, sir, the United States sell raw cotton, 
etc., to the amount of twelve millions, to Great 
Britain, and take in exchange for it twelve millions 
cf woollen and cotton goods. Mr. Say says this 
commerce is profitable to both nations ; it is better 
to raise cotton and to exchange it for English cloth 
if there is a better opportunity to plant cotton than 
to manufacture cloth and cotton goods, and if we 
can purchase manufactured goods cheaper than we 
can make them at home. He only contemplates 
the gain in matter for matter, as a merchant does ; 
he judges after the principles of individual economy. 
But as a citizen of the United States, or as a 
political economist, he ought to reason thus : A 
nation is independent and powerful in the degree 
as its industry is independent and its productive 
powers are developed. This exchange makes us 
dependent, in our market as well as in our supply, 
upon England, the most powerful and industrial 
nation on earth, and in purchasing cotton and 
woollen goods from England, an immense pro- 
ductive power is lost. If our merchants gain some 
millions of money, and our cotton planters the 
advantage of clothing themselves in fine woollen 
and cotton goods, let us see what the nation in 



190 LIFE OF FRIEDRICH LIST 

general loses by being depressed in its manu- 
facturing power. It is a fact that a population 
of seventeen millions in Great Britain, by the com- 
pletion of its productive powers, is enabled to 
consume and to sell for fifty-five millions of pounds, 
or 235 millions of dollars, of woollen and cotton 
manufacture. 

The population (2) of these United States will 
amount after thirty years to at least thirty millions, 
and if we complete our productive powers in that 
time so as to make them equal to those of England, 
in proportion to the population, the value { of 
woollen and cotton manufacture will amount to 
the enormous sum of 415 millions a year, which 
will be produced totally by our own labour, pos- 
sessing land and pasture enough to raise cotton 
and wool as much as we want. But suppose 
you realize not more than the fourth part of the 
English manufacturing power i.e. one hundred 
millions in what a proportion stands this power 
of creating every year and for an infinite time, such 
an immense mass of productions, with those 
beggarly twelve millions, exchange of matter, if 
only compared in the amount of money! Take 
further into consideration what an increase of 
population and of capital, of mind as well as of 
matter, and in consequence what an increase 
of material strength, must be effected by this com- 
pletion of our productive power, and you cannot 



AMERICAN POLITICAL ECONOMY 191 

fail to perceive that Messrs. Smith and Say's 
system, in only taking the exchange of matter for 
matter into consideration, must be fundamentally 
wrong. Mr. Say says, this completion of pro- 
ductive powers can only be effected by the trade 
in increasing your capital; by political measures 
you cannot increase the capital ; you only can give 
it another direction (3) than industry would give to 
it unaided, because if it would be more profitable 
to manufacture broad cloth and cotton goods than 
to raise wheat and raw cotton, the individual would 
prefer the former kind of industry, and complete 
the productive power without your aid. 

This reasoning, partly correct in individual and 
cosmopolitical economy, is quite incorrect in politi- 
cal economy. 

I. In the first place, population, capital, and pro- 
ductive skill have by their nature the tendency to 
extend themselves over the whole globe without 
the aid and interposition of political power and 
national interests ; to overflow from those countries 
where they are in superabundance to those where 
they are scarce. Hundreds of millions applied to 
raise and maintain an English naval power, armies, 
and fortresses would have gone to increase industry 
elsewhere ; English capital would not be contented 
at home by an interest of two or three per cent, on 
account of its superabundance; English skill and 
experience in the manufacturing arts would rather 



I 9 2 LIFE OF FRIEDRICH LIST 

have gone elsewhere to increase foreign industry 
than remain to perish at home. English capital of 
mind and matter is, therefore, formed by English 
political power and separate national interest into 
one mass effecting the elevation of that island 
above the whole globe, and changing its natural 
tendency into the suppression of the manufacturing 
power of all other nations. This pernicious change 
of effect cannot be prevented by the skill and in- 
dustry of the individuals of other nations; a single 
individual is as unable to overcome the united 
force of the capital and skill of a whole nation by 
his individual strength, as an American merchant 
would be unable to defend his single ship by his 
own strength against the aggressions of the English 
navy, without the aid of an American navy. 

II. It is not true that the productive power of 
a nation is restricted by its capital of matter. Say 
and Smith having only in view the exchange of 
matter for matter, to gain matter, ascribe to the 
matter an omnipotent effect which it has not. 
Greater part of the productive power consists in 
the intellectual and social conditions of the indi- 
viduals, which I call capital of mind. 

Suppose ten single woollen weavers in the 
country possess a thousand dollars capital each; 
they spin the wool by the wheel, they possess 
very inferior tools, they are not skilled in the art 
of dyeing, each of them manufactures for himself, 



AMERICAN POLITICAL ECONOMY 19} 

must do everything himself, and therefore each 
produces not more than a thousand dollars of 
cloth a year. Suppose now the ten manufacturers 
unite their capital and their labour, they invent (4) a 
spinning machine, a more perfect weaving machine, 
they are instructed in the art of dyeing, they divide 
the labour amongst them, and in this way they are 
enabled to manufacture and to sell every month 
ten thousand dollars' worth of broad cloth. The 
same capital of matter (5) amounting to $10,000 pro- 
duced formerly only $10,000 worth of broad cloth a 
year, produces now by the improved social and 
intellectual conditions, or by the acquired capital 
of mind, $100,000 worth of broad cloth. So can a 
nation with the same existing matter improve its 
productive power tenfold in improving its social 
and intellectual conditions. 

III. The question is only whether this nation is 
enabled : 

1. By its natural means to increase its 

productive power, by fostering cotton 
and woollen manufactories? (capital of 
matter). 

2. Whether by its present industry, instruc- 

tion, enterprising spirit, perseverance, 
armies, naval power, government (capital 
of mind), it is reasonably to be expected 
that it can acquire the necessary skill to 
complete in a short time its productive 

o 



194 LIFE OF FRIEDRICH LIST 

power by these manufactories, and 
whether it can protect them by political 
power if acquired. 
And lastly : 

3. Whether there exists so much super- 
abundance of food, utensils, materials, 
raw stuff, etc. (capital of matter), as to 
go on fairly by using the capital of 
nature and employing the capital of 
mind. 

I. There is pasture enough to raise a hundred 
million of sheep, and land enough to raise cotton 
for the whole world, besides all other materials 
and provisions. If it would be sheer folly for the 
Swedish Government to establish those manu- 
factories, because it possesses neither opportunity 
to raise a sufficient quantity of wool and cotton, 
nor the necessary naval power to secure its 
supply from abroad, or a foreign market for its 
manufacture, would it not be equal folly for 
these United States not to establish and foster 
them? 

II. There exists in the United States a degree 
of industry, of instruction, of emulation, of enter- 
prising spirit, of perseverance, of unrestricted 
intercourse in the interior, an absence of all hin- 
drances of industry, a security of property, a market 
and consumption of necessaries and comforts of 
life, and a freedom, such as are not to be found in 



AMERICAN POLITICAL ECONOMY 19$ 

any other country. If the Government of Spain 
could not by any arrangements whatever raise in 
a hundred years ten prosperous manufacturing 
establishments, and if raised could never protect 
them, this country can raise in a few years a 
hundred, and give them every kind of protection. 

III. There exists in these United States an 
immense quantity, a superabundance of all kinds 
of necessaries of life ; and of labour, to nourish 
double the present number of inhabitants, to build 
them houses and shops and mills, to procure them 
materials and tools. What else is necessary to 
establish manufactories, and what branch of 
industry may not be carried on by such means 
upon the largest scale ? Look at the coarse cotton 
manufactories, and tell me whether the capital 
used in this branch has been derived from any 
other branch of industry where it was more 
profitably employed. The manufacturers built 
houses and constructed machinery they wanted 
materials: timber, iron, bricks did agriculture 
therefore lose hands for labour (which it acquired), 
or one log, or one pound of iron ? No, sir, these 
things existed all in superabundance. The manu- 
facturers wanted raw cotton, but did the material 
not exist in superabundance within our own 
limits? Could it not be brought from New 
Orleans, converted into coarse cotton, and carried 
back to New Orleans for payment of the raw 



196 



LIFE OF FRIEDRICH LIST 



material in half the time in which it was formerly 
carried to Liverpool, to lie there until sold and 
converted into manufactures, and brought back to 
our own country? They wanted provisions for 
those men who made their buildings and their 
machinery, and they want them every day for 
those who make their goods ; but did agriculture 
in Pennsylvania miss one bushel of wheat after 
having sold six hundred thousand barrels of flour 
to New England? Money was spent by the enter- 
prising, but this money was not taken from agri- 
culture; it was given to agriculture, it served to 
raise agriculture. From this example, sir, you 
may learn how far wrong Smith and Say are in 
asserting that capital of matter increases but 
slowly. (6) This was true in former times when 
industry was checked in every way, when the new 
followers of chemistry, of mechanics, etc., were 
not yet in existence : it was true in old settled 
countries, where nearly all natural means were 
already used ; but it is not true in a new country, 
where not the one-tenth part of the capital of nature 
is in use, where new inventions do wonders, where 
industry is delivered of all hindrances, where, in 
short, a new state of society has a capital of mind 
never experienced. If population increases in 
such a country in a degree never experienced, the 
increase of capital of matter will outstrip even the 
increase of population, if the community be wise 



AMERICAN POLITICAL ECONOMY 197 

enough to employ its capital of mind in order to 
develop and use the capital of nature with which 
it is blessed. 

IV. If the disciples of the old theory assert it 
would not be economical to sacrifice a certain 
profit of a nation, derived from exchanges of 
matter for matter, in order to acquire a future 
productive power, I will refute them by a strik- 
ing example. Suppose a farmer is convinced he 
could improve his condition twofold if he would 
establish a Fulling Mill, possessing water power, 
timber, wool, everything necessary except skill and 
experience to erect the establishment and carry it 
on. He sends his son or another of his family to 
the city to acquire the necessary skill. This 
farmer, sir, not only loses the labour of his son, 
and all the wheat and grain it would produce, but 
he loses, moreover, the sum actually expended in 
the instruction of his son. He sacrifices a great 
deal of his capital of matter, and the balance of his 
account would appear to his disadvantage, so that 
a fool who sees no deeper than the surface would 
censure him. But the sum he lost in this capital 
of matter he made up ten times over by the in- 
crease of his productive power. This farmer, sir, 
is brother Jonathan. It is true some men will 
for the first year enrich themselves by political 
measures to the loss of individuals ; but this is 
the expense incident to the completion of the 



I 9 8 LIFE OF FRIEDRICH LIST 

productive power of the nation, and this first 
expense will after some years be ten times com- 
pensated by the benefit arising from a more 
perfect national economy. On giving patents for 
new inventions you are directed by the same 
views. It will encourage new inventions by 
securing to the inventors the first advantages of 
them. The community pays for these advantages, 
but not more than the value of the new inventions 
and of securing them to the whole community. 
Without these privileges many of the most valu- 
able inventions would die with the inventor, as in 
former times. 

If people repeat the assertion of Smith and 
Say, that duties upon imports produce a monopoly 
to the home manufactures, they consider not the 
advanced state of society. In former times, when 
capital and manufacturing skill were scarce and 
rare, when the greater part of chemical technology 
and of mechanics was a secret, a monopoly may 
have been produced by protecting duties. But in 
our times and in this country another state of 
things has taken place. Every one knows, or may 
learn from books, how white lead, sulphuric acid, 
and everything else can be manufactured. There 
is in every part of the country capital and enter- 
prising spirit enough to enter into any lucrative 
branch of industry, and experience shows that 
every manufacture promising an extraordinary 



AMERICAN POLITICAL ECONOMY 199 

profit is soon brought to a level by a competition, 
a brilliant example of which was given by the 
American coarse cotton manufactories, which now 
sell their goods one hundred per cent cheaper 
than the English did. 

V. Even if there were not capital and skill 
enough in the country they would be drawn from 
abroad by political measures. Under No. I. I 
mentioned that capital and knowledge have the 
tendency to extend themselves over the whole globe, 
and that they go from those parts where they are 
in superabundance to those where they are scarce. 
(To my knowledge the theorists (7) neither observed 
this tendency, nor did they justice to it) As this 
tendency is checked by the policy, etc., of other 
nations, so it can be restored by counteracting 
that policy. On securing to foreign capital and 
skill a premium in this country, you will attract 
them from abroad. The United States have this 
more in their power than any other nation, because 
they possess more capital of nature (not yet taken 
into possession) and more capital of mind than 
any other nation. Here an immense mass of 
natural riches have not yet got a proprietor. 
Here an Englishman finds his language, his laws, 
his manner of living; the only thing he does not 
find are the immense taxes and the other evils of 
his own country. On coming here, any man, from 
whatever country he comes, if possessing capital, 



200 LIFE OF FRIEDRICH LIST 

industry and useful knowledge, improves his con- 
dition. I know of no other country which enjoys 
such opportunities and means of attracting foreign 
capital and skill. (8) Whilst the United States, by 
protecting duties, would attract foreign capital and 
skill, they would prevent in the interior a very 
disadvantageous extension of population and capital 
over an immense continent. I am not, sir, one of 
those who estimate the power and wealth of this 
union by the number of states. As the Roman 
military power was weakened by the extension of 
their territory, so, I fear, the power, the progress 
of civilization, the national strength of this union 
would be checked by an additional accession of 
states. Fifty millions of Americans in one hundred 
states scattered over the whole continent, what 
would they do ? Clear land raise wheat and eat 
it. The whole American history of the next 
hundred years shall be contained in these three 
words, if you do not what Jefferson said place 
the manufacturer by the side of the farmer. This 
is the only means of preventing population and 
capital from withdrawing to the west. Ohio will 
soon be as popular as Pennsylvania, Indiana as 
Ohio, Illinois as Indiana; they will pass over the 
Mississippi, next the Rocky Mountains, and at last 
turn their faces to China instead of to England. 
Pennsylvania and all the eastern and middle states 
can increase in population, in arts and science, 



AMERICAN POLITICAL ECONOMY 201 

civilization and wealth, and the union can grow 
powerful only by fostering the manufacturing 
interest. This, sir, I think the true American 
political economy. 

Respectfully <your most humble and obedient 
servant, 

FR. LIST. 



NOTES TO LETTER IV 

Page 187. (i) The whole argument of this letter is expanded in 
the "National System," especially chap. xiii. ("The National 
Division of Commercial Operations") and chaps, xxxi., xjucti. 
(" The System of Values of Exchange "). 

Page 190. (2) Population. In 1860 the population of United 
States was, in fact, 31 millions. 

Page 191. (3) Another direction. So List himself in Letter 
VIII. "If such a branch is raised to an uncommon height, the 
business draws capital, labour, and skill from others." 

Page 193. (4) They invent. This is not a necessary consequence 
of their union. 

Page 193. (5) The same capital of matter. But this has, x 
hypothesi^ been increased by the new machines. 

Page 196. (6) Capital of matter. . . slowly. Smith, "Wealth 
of Nations," II. chap. iii. "The progress is frequently so gradual 
that, at near periods, the improvement is not only not sensible, 
but . . . there frequently arises a suspicion that the riches and 
industry of the whole are decaying." Also Say, " Principes," I. 
chap. ii. "The increase of capital is naturally slow of progress ; 
for it can never take place without actual production of value, and 
the creation of value is the work of time and labour besides other 
ingredients. 

Page 199. (7) The theorists. Adam Smith deals with the point 
at some length, " Wealth of Nations," II. chap. v. " On the Different 
Employments of Capitals." 



202 LIFE OF FRIEDRICH LIST 

Page 200. (8) Hamilton " Report," p. 21. " The powerful invita- 
tion of a better price for their fabrics or their labour ; of greater 
cheapness of provisions and raw materials ; of an exemption from 
the chief part of the taxes, burdens, and restraints which they 
endure in the old world ; of greater personal independence and 
consequence under the operation of more equal government ; and 
of what is far more precious than religious toleration, a perfect 
equality of religious privileges." And p. 35, " When the manu- 
facturing capitalist of Europe shall advert to the many important 
advantages which have been intimated in the course of this report, 
he cannot but perceive very powerful inducements to a transfer of 
himself and his capital to the United States." 



LETTER V 

Reading, July 19, 1827. 

DEAR SIR, 

In national economy, the effect of 
measures and of events, of the condition and of 
the arts of individuals, is as different as the 
circumstances are, in which the different nations 
are existing; and all that in general can be said 
is this, that if they are promoting the productive 
power of the nation, they are beneficial; if not 
not Every nation (i) must follow its own 
course in developing its productive powers ; or, 
in other words, every nation has its particular political 
economy. 

Further : conditions, events, etc., may be profit- 
able in individual economy for some persons, and 
injurious to the community; or, on the contrary, 
they may be injurious to individuals, and prove 
highly beneficial to the community: individual 
economy is not political economy. 

So measures, principles can be beneficial to 
mankind, if followed by all nations, and yet prove 
injurious to some particular countries, and vice 
versa. Political economy is not cosmopolitical economy 

313 



204 LIFE OF FRIEDRICH LIST 

I. Every nation has its particular economy. 

Does an increase of population promote the object of 
national economy ? For the United States it does ; 
in China and Hindostan it does not. The emigra- 
tion of men from those countries where food is 
scarce and labour in superabundance, is a public 
blessing ; on the contrary, it is a lamentable sight 
to see citizens of the United States emigrate to 
Canada, while the exportation of black people, 
though diminishing our numbers, may be con- 
sidered as beneficial ; it is an exportation of 
weakness and not of power. 

Does labour promote that object? It does in 
countries where it is properly divided, otherwise 
it is partly lost. Here agricultural countries, not 
possessing outlets for their surplus produce, not 
being able to change this surplus for other neces- 
saries and comforts, produce nothing by that 
surplus but an increase of population. The people 
prefer to spend part of their time to idleness, 
rather than to produce nothing by labour. Foreign 
prohibitions destroy therefore a part of our labour, 
which is only to be revised by counteracting that 
policy in calling another productive power into 
life, which consumes that surplus and gives its 
produce in exchange. 

Can this be said of all countries merely agricul- 
tural? No. In new settled countries, the sur- 
plus of labour and produce is for a long time 



AMERICAN POLITICAL ECONOMY 205 

advantageously employed in clearing and improving 
land, in erecting houses and barns, in increasing 
the stock of cattle. We see, consequently, the 
western states fast developing their productive 
power by agriculture, while the eastern states 
remain stagnant. After having developed their 
natural means to a certain degree, they will become 
stagnant too, and with their surplus produce, the 
more it grows, the more depress the agriculture 
of the eastern states, if they raise not manu- 
factories. 

Restrictions, are they in all countries equally 
effective and advisable ? No. Mexico and the 
Southern Republics would act unwisely in not 
importing foreign merchandise in exchange for 
their precious metals and raw produce ; their 
people, being yet uninstructed, indolent, and not 
accustomed to many enjoyments, must first be led 
by a desire of enjoyment to laborious habits, and 
to improvements of their intellectual and social 
conditions. Russia will never succeed in raising 
a manufacturing power, unless the emperors of 
that vast empire grant free charters to their cities 
like the emperors of Germany, whose creations 
grew, in a few centuries, from barbarism to a 
wonderful degree of wealth and civilization. Spain 
must first get rid of her superstition, her abso- 
lute power, and her cloisters. There must exist 
first a certain stock of freedom, of security, of 



206 LIFE OF FRIEDRICH LIST 

instruction, etc., to foster manufactories, a stock 
wherewith the United States are amply provided. 

Would the United States act reasonably if they 
should foster all kinds of manufactories (2) with equal 
care? By no means. Every improvement must 
be advanced by steps. A new country like this 
increases its productive powers by only fostering 
those manufactories which employ a number of 
labourers, and consume great quantities of agricul- 
tural produce and raw materials ; which can be 
supported by machinery and by a great internal 
consumption (like chemical produce, woollen, 
cotton, hardware, iron, earthenware, etc., manu- 
factories), and which are not easy to be smuggled. 
In fostering finer articles with equal care they 
would injure the development of the productive 
powers. Those articles of comfort and luxury, if 
imported cheaper than we can manufacture them, 
get in use among all labouring classes, and act as 
a stimulus in exciting the productive powers of the 
nation. Its consumption becomes by-and-by more 
important, and by-and-by the time will arrive when 
these articles, with a moderate encouragement, will 
be manufactured too within our limits. (3) 

Are canals and railroads (4) beneficial to a country ? 
Under conditions. In bringing people and produce 
nearer each other, they support the exchange and 
promote labour if labour is properly divided. If 
not, they may injure certain parts of the country 



AMERICAN POLITICAL ECONOMY 207 

to the advantage of other parts, by increasing 
competition in the surplus of agricultural produce. 
So I firmly believe that the eastern parts of Penn- 
sylvania can only derive advantage from those 
improvements by raising a manufacturing industry, 
and exchanging the surplus of their manufactures 
for the agricultural produce of the western. 

Machinery and new inventions f For thickly 
settled countries possessing no commerce, little 
industry, and a superabundance of labourers, they 
may be a public calamity; whilst every such 
improvement in the United States is to be con- 
sidered a public blessing. In time I hope the 
slaves of this country will be made of iron and 
brass, and set in movement by stone coal instead 
of whips. 

Consumption f (5) If reproductive, says Say, it 
increases wealth. But the question is whether it 
increases productive powers? In a nation of 
idlers hundreds of millions may be consumed 
without effect, but in a nation of industrious men 
like this I hardly imagine an honest and innocent 
consumption which would not be a stimulus to 
productive powers if labour would be properly 
divided (except whisky manufacturing, which is a 
production of weakness, not of power). Con- 
sumption and enjoyment go hand in hand. The 
desire to enjoy repeatedly more in indefinite 
time to procure even our posterity enjoyment, 



208 LIFE OF FRIEDRICH LIST 

begets labour and production, and production 
facilitates consumption. Consumption begets 
therefore production, as much as production 
begets consumption. 

Parsimony ? (6) If exercised in the old countries 
by men who are in possession of immense estates 
by birthright, would certainly not be a public 
blessing ; it only would increase the inequality of 
property at the expense of the lower classes. The 
parsimony of a farmer living in a new settlement 
sparing all his income and bestowing all his time 
and labour to improve his land, increase his stock, 
walking barefoot and wearing self-prepared skins, 
increases productive powers, because the land 
would not be improved without it. The same 
degree of parsimony in a settled country would 
diminish the productive powers ; there is no hatter, 
no shoemaker to eat bread, where no farmer is to 
wear hats and shoes. 

Lawyers, physicians, preachers, judges, lawgivers, (7) 
administrators, literary men, writers, instructors, 
musicians, players, do they increase the productive 
powers ? In Spain for the most part they do not : 
lawgivers, judges, lawyers, keep down the people ; 
the priesthood consumes the fat of the land and 
nourishes vicious indolence ; instructors instruct 
only those burdensome classes to become more 
burdensome ; musicians, players, serve only to 
make idleness to the idler more agreeable. Even 



AMERICAN POLITICAL ECONOMY 209 

sciences are pernicious there, because they serve 
not to improve the condition of the people but to 
make it worse. All this is different in the United 
States, where the exertions of those men have 
a tendency to increase mightily the productive 
powers : lawyers, lawgivers, administrators, judges, 
improve the public condition; preachers, instruc- 
tors, writers, printers, improve the mind and 
morality of the people ; and even those men who 
only procure honest pleasures to the people, are 
beneficial in begetting enjoyment and recreation 
for those who need to acquire new strength for 
new exertions. 

Money: does the importation of it increase productive 
powers ? In Spain it did the contrary. The manner 
in which it was acquired and consumed, the con- 
dition of the people and the Government, rendered 
the same precious matter poisonous to the people 
and the Government which would give immense 
power and strength to the United States, if 
imported into this country in exchange for its 
produce. A country may have a superabundance 
of precious metals, as Mexico, and the exporta- 
tion of it is beneficial to the productive powers. 
It may have too little, in comparison with its 
industry, and in that case the importation of it is 
beneficial. 

It must be remembered that I intended here 
not to exhaust those matters, but only to allege as 

p 



210 LIFE OF FRIEDRICH LIST 

much of them as was necessary to prove that every 
nation must follow its particular course in developing 
its productive powers. 

I am, very respectfully, 

Your most humble, obedient servant, 

FR. LIST. 



NOTES TO LETTER V 

Page 203. (i) Every nation. This sentence is the keynote of 
the " National System ; " chaps, x and xv. are especially emphatic 
expansions of it. 

Page 206. (2) All kinds of manufactories. Chap. xxvi. of the 
" National System," " Customs Duties as a chief means of estab- 
lishing and protecting the internal national power," is an expansion 
of this thesis. 

Page 206. (3) Limits. Hamilton" Report," p. 61. "In the selec- 
tion of objects (t.e. in the tariffs) five circumstances seem entitled 
to particular attention ; the capacity for the country to furnish the 
raw material ; the degree in which the nature of the manufacture 
admits of a substitute for manual labour in machinery ; the fertility 
of execution ; the extensiveness of the uses to which the article can 
be applied ; its subserviency to other interests, particularly the 
great one of national defence." List adopts these tests of suitability 
in the " National System," chap, xv., " Nationality and the Economy 
of the Nation." 

Page 206. (4) Canals and railroads. It is curious to contrast 
this qualified approval with List's warm advocacy of railroads 
some eighteen months later. In the " National System," chap. 
xvii., he takes the view (which, as regards Western Europe is no 
doubt the truer one), that improved transport is called into existence 
by "the manufacturing power." 

Page 207. (5) Consumption. Cp. "National System," chap. 
xxv., "The Manufacturing Power and the Inducement to Pro- 
duction and Consumption." 



AMERICAN POLITICAL ECONOMY 21 1 

Page 208. (6) Pat litnony. Cp. " National System," chap, six., 
* Where every one saves and economizes as much as he can, no 
motive can exist for production." 

Page 208. (7) Lawgivers. This argument is dealt with at 
length in the " National System,* chap. xii. 



LETTER VI 

Reading, July 20, 1827. 

II. Individual Economy (i)is not Political Economy. 

An individual only provides for his personal 
and family purpose, he rarely cares for others or 
for posterity, his means and views are restricted, 
rarely transgressing the circle of his private busi- 
ness ; his industry is confined by the state of 
society in which he lives. A nation provides for 
the social wants of the majority of its members, so 
far as the individuals cannot satisfy these wants 
by their private exertions; provides not only for 
the present, but for future generations ; not only 
for peace but for war; its views are extended not 
only over the whole space of land it possesses, but 
over the whole globe. An individual, in promoting 
his own interest, may injure the public interest ; 
a nation, in promoting the general welfare, may 
check the interest of a part of its members. But 
the general welfare must restrict and regulate the 
exertions of the individuals, as the individuals must 
derive a supply of their strength from social power. 
Individuals without the regulations of a community 

212 



AMERICAN POLITICAL ECONOMY 

are savages; and the principle of letting every 
individual alone is most flourishing among the 
Indians. Here, too, the truth lies in the middle. 
It is bad policy to regulate everything and to 
promote everything by employing social powers, 
where things may better regulate themselves and 
can be better promoted by private exertions ; but 
it is no less bad policy to let those things alone 
which can only be promoted by interfering social 
power. 

Look around, and you see everywhere the 
exertions and acts of individuals restricted, regu- 
lated, and promoted on the principle of the com- 
mon welfare. The commonplace of laissez fairc 
(t laissez passer, invented by a merchant, 1 can 
therefore only be alleged sincerely by these 
merchants. 

This principle would be only true if individuals 
and national interest were never in opposition. But 
this is not the case. A country may possess many 
extremely rich men, but the country is the poorer, 
because there is no equal distribution of property. 
Slavery may be a public calamity for a country, 
nevertheless some people may do very well in 
carrying on the slave trade and in holding slaves. 
Notwithstanding an absence of liberal institutions 
may be extremely injurious to a full development 

1 This commonplace was invented by M. de Gourncy, a French 
importer. 



214 LIFE OF FRIEDRICH LIST 

of the productive powers of a nation, some classes 
may find their reckoning in this bad state of things. 
The nations may suffer from an absence of manu- 
facturing industry, but some people may flourish 
in selling foreign manufactures. Canals and rail- 
roads may do great good to a nation, but all 
waggoners will complain of this improvement. 
Every new invention has some inconvenience for a 
number of individuals, and is nevertheless a public 
blessing. A Fulton may consume his whole 
fortune in his experiments, but the nation may 
derive immense productive power from his exer- 
tions. An individual may grow rich by extreme 
parsimony, but if a whole nation would follow his 
example, there would be no consumption and, in 
consequence, no support of industry. The more 
the individuals of the Southern States endeavour 
to supply the low price of cotton in England by 
planting greater quantities, the less will cotton 
bring in England ; the less will the nation derive 
income from that branch of industry. Individuals 
may become rich by hazardous bank schemes, but 
the public may lose by them. 

Without interference of national power there is 
no security, no faith in coined money, in measures 
and weights, no security for the health of seaports, 
no security for the commerce at sea by the aid of 
a navy, no interference for the citizens in foreign 
seaports and countries by Consuls and Ministers, 



AMERICAN POLITICAL ECONOMY 215 

no titles to land, no patents, no copyright, no 
canals and railroads, no national road. Industry 
entirely left to itself, would soon fall to ruin, and 
a nation letting everything alone would commit 
suicide. 

The adherents of the old theory feel this very 
well wonderful to say not to be obliged to fall 
by the consequences, they desperately deny the 
proposition. Mr. Cooper, feeling very well that 
an acknowledgment of the true character of a 
nation (as I defined it), and all the consequences of 
the division of the human race into nations (as I 
traced them in my former letters), would overthrow 
the whole old system, negatived this character 
entirely, saying in his book on political economy, 
" Hence the moral entity, the grammatical being, 
called a nation, has been clothed in attributes that 
have no real existence, except in the imagination of 
those who metamorphose a word into a thing, and 
convert a mere grammatical contrivance into an 
existing and intelligent being. It is of great 
importance that we should be aware of the mistake, 
to avoid limitation, description and periphrasis 
grammatical contrivances and no more; just as 
we use the signs and letters of Algebra to reason 
with, instead of the more complex numbers they 
represent" (See p. 19.) (2) 

The more I am convinced of the superior talents 
and of the great learning of President Cooper, the 



216 LIFE OF FRIEDRICH LIST 

more I am astonished to see him build up on such 
false ground, a system of political economy, by 
which he intends to enlighten a whole nation about 
its interest and to prepare the youth of that nation 
for political life; a system which would lead this 
nation to ruin, to suicide. A few words are suffi- 
cient to expose the gross error in which Mr. 
Cooper fell in this fundamental phrase, blinded 
by his zeal for keeping up the old theory. Mr. 
Cooper confounded a grammatical being with a 
moral being, or what the civilians call a moral person 
(a chartered society, a plurality of men, possessing 
common rights and obligations, common interests 
and institutions). A grammatical being is a mere 
name, signifying different things or persons, being 
only united in the use of language, in order (as Mr. 
Cooper says) to avoid limitations, descriptions, etc. 
The names bar, yeomanry, mob are such gramma- 
tical beings; the persons denoted by this name 
possess neither social rights nor social obligations ; 
they cannot prosecute a law suit under this name 
before a court, nor can they be accused. But the 
American nation can, as Mr. Cooper may learn 
from the title of many indictments. A being 
which elects presidents and representatives, which 
possesses a navy, land, and debts ; which [makes 
war and concludes peace; which has separate 
interests respecting other nations, and rights as 
well as obligations respecting its members, is not a 



AMERICAN POLITICAL ECONOMY 217 

mere grammatical contrivance ; it is not a inert gram- 
matical being ; it has all the qualities of a rational 
and real existence. It has body and real 
possessions ; it has intelligence, and expresses its 
resolutions to the members by laws, and speaks 
with its enemy not the language of individuals, 
but at the mouth of cannon. 

With this false foundation the whole system of 
Mr. Cooper falls to pieces. In vain are his in- 
genious reflections and parallels, in vain all his 
learned allegations ; common sense rejects his 
reasoning, as emanating from a false principle. It 
is a very instructing contemplation, to see a man 
of such superior talents build up a system of 
political economy on a ground which, as a lawyer 
and philosopher, and as a learned politician, he 
must condemn. What would Mr. Cooper, as 
Attorney-General, have said, if the counsel of a 
defendant had opposed to one of his indictments, 
that the American nation is a mere grammatical 
being, a mere man ; which only by the contrivance 
of man is converted into an existing and intelligent 
being, and which therefore cannot prosecute a 
lawyer before a court? 

Very respectfully, your most humble, obedient 
servant, 

FR. LIST. 



218 



LIFE OF FRIEDRICH LIST 



NOTES TO LETTER VI 

Page 212. (i) Individual economy. In the " National System," 
chap, xiv., "Private Economy and National Economy." List, 
after quoting Adam Smith, " What is prudence in the conduct of 
every private family, can scarcely be folly in that of a great 
kingdom," answers, " No ; that may be wisdom in national 
economy which would be folly in private economy, and -vice versd." 

Page 215. (2) List combats this phrase of Cooper again in the 
" National System," chap. xi. 



LETTER VII 

Reading, July 22, 1827. 

I proceed to develop the third proposition in 
my fifth letter. 

III. Political Economy (i) is not Cosmopolite al 
Economy. 

It seems to be in the plan of Providence to 
improve the conditions of the human race, and to 
raise their powers and faculties by an eternal 
contest moral and physical between opinion and 
opinion, interest and interest, nation and nation. 
History seems to confirm this reflection. The 
Italian and German cities, founded by an absence 
of security in the open country, grew powerful and 
wealthy by the contest against the robbers of the 
age by which they were forced to unite their 
individual strength. Philip's hangmen created the 
union of the Netherlands, and the wars of the 
new republic against Spain elevated her to a 
degree of wealth and power which was never 
thought of before. So events which seemed at 
first destructive to individuals, and had, indeed, 
destructive effects for the present generation, 

219 



220 LIFE OF FRIEDRICH LIST 

became a cause of happiness for posterity. So 
what seemed to weaken the human race served to 
elevate its powers. Look at the histories of 
England and France, and every page will confirm 
this truth. And your own history, sir, affords 
more than any other bright examples of it. Sup- 
pose England had emancipated these United States 
by her own accord, would they have made such 
astonishing advances towards power and wealth, 
without the excitement of a revolutionary war? 
Did not the last war create a navy and lay the 
corner-stone of a manufacturing industry? Though, 
therefore, philosophers may imagine that an eternal 
peace, a union of the whole human family under a 
common law, would produce the highest degree 
of human happiness, it is nevertheless true that 
the contests between nation and nation, often 
pernicious and destructive to civilization, were as 
often causes of its promotion, as a people was 
struggling for its freedom and independence, 
against despotism and depression; and that as 
often as this happened, it produced an elevation 
of all its faculties, and thereby an advancement 
of the whole human race towards greater per- 
fection. 

The same may be said of the industrial contest 
between nations. Though we may imagine free 
trade would be beneficial to mankind, it is yet to 
be questioned whether a free and uninterrupted 



AMERICAN POLITICAL KCONOMV 2:1 

intercourse under a common law would promote 
the development of the productive powers like the 
existing contests. (2) 

But be that as it may, that stage of things 
under which free unrestricted trade possibly 
might exist is not the actual state of the world, 
and as long as the division of the human race into 
independent nations exists, political economy will 
as often be at variance with cosmopolitical prin- 
ciples, as individual economy is at variance with 
political economy. In this present state of things, 
a nation would act unwisely to endeavour to pro- 
mote the welfare of the whole human race at the 
expense of its particular strength, welfare, and 
independence. It is a dictate of the law of self- 
preservation to make its particular advancement 
in power and strength the first principles of its 
policy, and the more it is advanced in freedom, 
civilization, and industry, in comparison with other 
nations, the more has it to fear by the loss of its 
independence, the stronger are its inducements to 
make all possible efforts to increase its political 
power by increasing its productive powers, and 
vice versa. 

Mr. Cooper is not of this opinion. After having 
denied entirely the character of nations, he reasons 
quite logically as follows : 

" No branch of commerce, no manufacture, is worth a wmr. 
1 incline to think that when a merchant leaves the shores of 



222 LIFE OF FRIEDRICH LIST 

his own country and trades everywhere, he ought to do this 
at his own risk, and ought not to be permitted to jeopardise 
the peace of the nation and induce a national quarrel to be 
carried on at the expense of the peaceable consumers at home. 
His occupation is not worth the protection it demands" 
(p. 120). (3) 

Our great shipping merchants may learn from 
this extract that they, too, would not escape the 
national suicide intended by the cosmopolitical 
system. Mr. Cooper places their ships at the 
mercy of the Bey of Tunis and of the Dey of 
Algiers, as he places the manufactures at the 
mercy of English competition, and thinks they 
both are not worth protection by national power. 
Mr. Cooper believes not in a national commerce, or 
a national manufacturing power; he sees nothing 
but individual and indirect gain. What then would 
be the consequence of such a policy? The first 
ship taken in a foreign sea with impunity, would 
be the signal to hunt after the property of all 
American merchants; our tonnage would in a 
short time be reduced to nothing; we could not 
trade with foreign countries but in foreign ships, 
and depending upon foreign regulations and 
interests; we would be placed at the mercy of 
the English navy; in short, our whole indepen- 
dence would be lost. It requires some self- 
government not to break out with suitable epithets 
against such a system of national suicide. 



AMERICAN POLITICAL ECONOMY 

As the commerce of a nation wants protection 
against foreign aggressions, even at the great 
expense of the country, and even at the risk of a 
war, so the manufacturing and agricultural interest 
must be promoted and protected even by sacrifices 
of the majority of the individuals, if it can be 
proved that the nation would never acquire the 
necessary perfection, or could never secure to 
itself an acquired perfection without such pro- 
tective measures. This can be proved, and I will 
prove it, and if the masters and disciples of the 
cosmopolitical theory are not convinced of this 
necessity that is no argument that it does not 
exist, but proves only that they do not understand 
the true nature of political economy. 

A manufacturing power, (4) like a maritime 
power (under which name I comprehend not only 
the navy, but the whole shipping of a country), is 
only to be acquired by long exertions. It takes 
a long time until the labourers are experienced in 
the different workmanship and accustomed to it; 
and until the necessary number for every business 
is at all times to be had. The more knowledge, 
experience, and skill are wanted for a particular 
business, the less individuals will be willing to 
devote themselves to it, if they have not a full 
assurance of their being able to make a living by it 
for their whole lifetime. Every new business is 
connected with great losses by want of experience 



224 LIFE OF FRIEDRICH LIST 

and skill for a considerable time. The advance- 
ment of every kind of manufactories, depends upon 
the advancement of many other kinds, upon the 
proper construction of houses and works, of instru- 
ments and machinery. All this makes the com- 
mencement of a new industry extremely difficult, 
whilst the undertakers have to contend with a 
want of labourers of skill and experience ; the first 
cost of starting a business is the heaviest of all, 
and the wages of the unskilled labourers in coun- 
tries which commence manufactories, are higher 
than the wages of the skilled ones in old manu- 
facturing countries. All cost double prices, and 
every fault in starting the business causes heavy 
losses, and sometimes the failure of the whole 
undertaking. The undertakers possess moreover, 
in most cases, not a sufficient knowledge of the 
ways and means to get the first materials profit- 
ably, and whilst they are struggling against all 
these difficulties they have great exertions to make 
to get customers, and often to contend with the 
prejudices of their countrymen, who, not willing 
to leave their old ways in doing business, are in 
most cases in favour of the foreign manufactories. 
Often they may be right. New establishments 
are seldom able to procure such finished articles 
in the first and second year as they would in 
the third and fourth, if supported, and neverthe- 
less their articles must be sold higher, It cannot 



AMERICAN POLITICAL ECONOMY 225 

be expected that the consumers as individuals, by 
their own accord, should support a manufactory, 
by purchasing less accomplished articles at higher 
prices, even if convinced that, in purchasing them, 
they would encourage the manufactories to im- 
prove their products, and to procure them after a 
while cheaper than foreign manufactures. 

All these circumstances are the cause why so 
many new establishments fail if let alone. Every 
failure breaks a man, because the greater part of 
their expenditure in building machinery, in pro- 
curing labourers from abroad, etc, is lost One 
example of such a failure effects a discouragement 
of all other new undertakings, and the most advan- 
tageous business cannot find afterwards a support 
from capitalists. 

In old manufacturing countries we observe 
quite the contrary. There are plenty of skilled 
labourers for every kind of business, at moderate 
terms, to be had. All buildings, machinery, imple- 
ments, are in the best condition; the expenditure 
for them is for the greater part reimbursed by 
gains already made. On the basis of the already 
acquired experience and skill, the manufacturer 
can improve daily his buildings and instruments 
at moderate expense ; he can save expenditure and 
perfect his manufactures. The manufacturer him- 
self is possessor of skill, undertaking capital, and 
he cannot be exposed to embarrassments by the 

Q 



226 LIFE OF FRIEDRICH LIST 

withdrawal of one of these essential parts, as in 
the case with new undertakings, where often the 
undertaker and the performer and the possessor 
of capital are different men, and the whole business 
can be stopped by the withdrawal of one of them. 
Credit and confidence of the old manufactures are 
established ; it is therefore as easy for the pos- 
sessor to get new support from capitalists as it 
is difficult for a new undertaker. The credit of 
his manufactures and his market is established ; 
he can produce finished articles at moderate 
prices, and yet afford his customers a liberal 
credit. 

Such are the natural differences between an old 
manufacturing country and a new country just 
entering into business. The old country, as long 
as it preserves its freedom, its vigour, its political 
power, will in a free intercourse ever keep down 
a rising manufacturing power. The Netherlands (5) 
would never have been deprived of their superior 
manufacturing power by the English without the 
regulations of Edward, Elizabeth, and the following 
Governments, and without the follies of the kings 
of France and Spain. A new country is, moreover, 
the less able to contend against the manufacturing 
power of the old country, the more the interior 
market of this old country is protected by duties, 
and the more its competition in the new country 
is supported by drawbacks and by an absence of 



AMERICAN POLITICAL ECONOMY 227 

duties in the foreign markets. The effects which 
these artificial means are producing I shall treat in 
my next letter. 

Very respectfully yours, 

FR. LIST. 



NOTES TO LETTER VII 

Page 219. (i) Political economy. This paragraph is expanded 
in the " National System," into chap, xi., " Political and Cosmo- 
political Economy." 

Page 221. (2) Existing contests. But tariff wars stand on a 
very different footing from trade competition. The essential aim 
of protection is to check foreign competition. 

Page 222. (3) This passage is quoted in an abbreviated form in 
the " National System," chap, xiv.," Private Economy and National 
Economy." 

Page 223. (4) A manufacturing power. This argument for the 
support of " infant " industries is used in a somewhat condensed 
and less effective form in chap. xxiv. of the " National System," 
"The Manufacturing Power and the Principle of Stability and 
Continuity of Work." Hamilton puts forward a long and closely 
reasoned plea to the same effect, " Report," pp. 28-30. He gives 
as reasons against the natural tendency of industry to seek the 
most profitable course, " The strong influence of habit and the 
spirit of imitation ; the fear of want of success in untried enter- 
prises ; the intrinsic difficulties incident to first essays towards 
a competition with those who have previously attained perfection 
in the business to be attempted; the bounties, premiums, and 
other artificial encouragements with which foreign nations second 
the exertions of their own citizens. . . . Whatever room there 
may be for an expectation that the industry of a people, under 
the direction of private interest, will upon equal terms find 
out the most beneficial employment for itself, there is none for a 
reliance that it will struggle against the force of unequal terms, or 
will of itself surmount all the adventitious barrier* to a 



228 



LIFE OF FRIEDRICH LIST. 



competition, which may have been enacted either by the advantages 
naturally acquired from practice and previous -possession of the 
ground, or by those which may have sprung from positive regula- 
tion and artificial policy." 

Page 226. (5) The Nether landers. This argument is expanded 
in the " National System," into chap. Hi., " The Netherlanders." 



LETTER VIII 

Reading, July 17, 1827. 

III. Political Economy is not Cosmopolitical 
Economy (continuation). 

The advantages procured by a judicial tariff 
system (i) are the political. 

i. By securing the interior market to our 
national industry, the manufacturing power is 
secured against all events, fluctuations of prices, 
and against all changes in the political and 
economical conditions of other nations. Events 
may happen whereby a foreign nation would be 
enabled to sell manufactures for a time cheaper 
than the interior manufacturers could make them. 
This state of things, though transitory, may never- 
theless affect the manufacturing power of the 
nation, because a stagnation of a few years in 
manufacturing business may effect the ruin of the 
establishments : the buildings would fall to ruin, 
or would be put to other purposes ; the machinery 
would get out of order, or be sold for old iron or 
firewood ; the labourers would either leave the 
country or apply themselves to another branch of 

ij 



230 LIFE OF FRIEDRICH LIST 

industry; the capital would go abroad or find 
other employments ; the customers would be lost, 
together with the confidence of the capitalists. A 
single new invention made in a foreign country, 
and not imitated immediately because yet kept 
secret, would destroy, in a free country, a whole 
branch of the manufacturing industry in a short 
time, whilst a protective system would preserve 
it until the secrecy is revealed, and our productive 
power increased by it 

2. By securing the home market (2) to home 
manufactures, not only the manufacturing power for 
the supply of our own wants is for all times secured 
against foreign changes and events, but an ascen- 
dency is thereby given to our manufacturing 
powers in competition with others, who do not 
enjoy this advantage in their own country. It is 
the same advantage that a people enjoys in being 
defended by natural and artificial fortifications 
against a neighbouring people living in an open 
country. All contests will be disastrous to such 
an unprotected people; it will even be ruined by 
its victories ; it will never enjoy the fruits of per- 
fect security ; the enemy, driven to-day with a loss 
from their borders, may repeat his aggressions 
to-morrow, and in all cases the country will be 
laid waste. This is exactly the case in a country 
protected by a wise tariff system, and another 
following the principle of free trade. 



AMERICAN POLITICAL ECONOMY 231 

Every man acquainted with manufacturing busi- 
ness knows that the existence of an undertaking 
depends upon a sufficient and speedy sale of such 
quantities of manufacturing goods as will cover 
trie interest of the capital, the costs of the produc- 
tion, and a reasonable gain for the undertaker. As 
long as a manufactory has not reached that point, 
the business can only be carried on in the hope 
of attaining it, and if this expectation is not ful- 
filled after a longer or shorter time, the undertaking 
will go to nothing. Everybody knows, moreover, 
that the cost of production in manufacturing busi- 
ness depends a great deal on the quantity that is 
manufactured. A manufacturer may manufacture 
a thousand yards of broad cloth a year, and sell a 
yard for six dollars, and he may lose money ; but 
he may manufacture twenty thousand yards of the 
same quality, and get no more than four dollars 
a yard, and he may make money. This circum- 
stance has a mighty influence in the rise and fall of 
manufacturing power. If the large supply of the 
home market is secured to an English manufactory, 
a steady sale of that quantity which is necessary 
to sustain his establishment is secured to him 
thereby. He is, for instance, sure to sell ten 
thousand yards of broad cloth a year in his own 
country for six dollars a yard to cover thereby the 
expenses of his establishment, and to clear besides 
a sufficient sum of money for himself. By this 



232 LIFE OF FRIEDRICH LIST 

home market he is enabled to manufacture yet 
other ten thousand yards of broad cloth for the 
foreign market, and to accommodate his prices to 
the existing circumstances abroad. The expenses 
of his establishment being already covered by the 
sales at home, the costs of producing other ten 
thousand yards for the market abroad comes by 
far less high, and he may still profit by selling 
them for three or four dollars a yard ; he may even 
profit in future if he gains nothing at present. 
Seeing the manufacturers of a foreign country 
lying in distress, he may sell for some years with- 
out any profit in the hope to get seven or eight 
dollars a year, and to clear twenty thousand dollars 
or thirty thousand dollars a year for a long time 
after the foreign manufactories are dead and buried. 
He carries this contest on with perfect tranquillity ; 
he loses nothing, and the hope of future gain is 
certain to him, whilst the manufacturer of the 
open country is struggling against a daily loss, 
nourishing a vain hope, leading him at last to a 
certain, inevitable, and radical ruin. This unhappy 
man is in quite a different situation from that of 
his projected competitor. He struggles, as we 
mentioned before, with all the difficulties of estab- 
lishing a new business, which all conspire so that 
he cannot sell even for such a price as after some 
years would render him a fair profit ; he struggles 
against the prejudices of his own countrymen ; his 






AMERICAN POLITICAL ECONOMY 233 

credit is shocked ; the little he sells makes his pro- 
duce dearer and his losses larger. He is forced to 
enhance his prices for the first years, whilst his 
competitor is enabled to diminish them. There 
ir.ust be in the commencement, particularly in 
broad cloth, a difference of from fifty to eighty 
per cent This contest cannot last long without 
national interference. His business is going to 
nothing, and affords a warning example to all his 
fellow-citizens not to have enterprising spirit in 
a country where the national interests are not 
understood; rather to do nothing at all, to let 
everything alone, just as would be the case with 
the shipping merchants if their industry were not 
protected by navigation laws, by the expense of a 
navy, or by his running the risk of a foreign war, 
in case of foreign aggressions, if their ships (as Mr. 
Cooper advises) should be placed at the mercy of 
the Dey of Algiers. They might then do better 
to dig the grounds in the backwoods, and convert 
their anchors into ploughshares. 

Hence we learn that duties, drawbacks, naviga- 
tion laws, by Mr. Smith and Say, are improperly 
called monopolies. They are only monopolies in a 
cosmopolitical sense in giving to a whole nation a 
privilege of certain branches of industry. But on 
the ground of political economy they lose this 
name, because they can procure to every individual 
of the nation an equal right of taking a share in 



234 LIFE OF FRIEDRICH LIST 

the benefits of the national privilege. And the 
privilege given to the English nation by the 
English Government of supplying the interior 
market, is so long an injury to the American 
nation as its Government procures not the same 
privilege to its own citizens. 

3. How another old commonplace of the 
cosmopolitan theory, "to buy from abroad if we can 
buy cheaper than manufacture" may stand against 
such an exposition I cannot conceive. We buy 
cheaper from foreign countries only for a few 
years, but for ages we buy dearer ; we buy cheap 
for the time of peace, but we buy dear for the 
time of war; we buy cheaper apparently if we 
estimate the prices in their present amount of 
money, but we buy incomparably dearer if we 
estimate the means wherewith we can buy in 
future. From our own countrymen we could buy 
our cloth in exchange for our wheat and cattle; 
from foreign countries we cannot. Our consumption 
of cloth is consequently restricted by our means 
which foreign nations take for payment, which 
are diminishing every day : our consumption of 
home-made cloth would increase with the increase 
of our production of provisions and raw materials, 
which are almost inexhaustible, and with our 
population which doubles itself every twenty 
years. 

Into such gross errors fall wise and learned men, 



AMERICAN POLITICAL ECONOMY 235 

if their theory has a wrong basis, if they take 
cosmopolitical for political principles, if they treat 
of the effects of exchange of matter instead of 
treating the cause of the rise and fall of productive 
powers. Smith and Say advise us to buy cheaper 
than we can manufacture ourselves, in contem- 
plating only the gain of matter in exchanging 
matter for matter. But weigh the grain of matter 
with the loss of power, and how stands the balance? 
Let us see. 

Smith and Say themselves estimate the amount 
of internal industry a great deal higher than 
foreign commerce; they do not venture on exact 
calculation, they say in all countries external 
commerce is of small consequence in comparison 
with internal industry. (Say Bk. I. chap, ix.) But 
other French writers estimate internal industry 
to exceed foreign commerce from twenty to thirty 
times. Mr. Cooper estimates it from ten to twelve 
times higher. We would not be far out of the 
way if we should take the modicum between the 
two extremities (twenty times), but to be quite 
moderate we will follow Mr. Cooper. If we have 
now proved, under No. 2, beyond all doubt that 
foreign industry aided by a productive system 
destroys the whole cloth manufacturing power of 
our own country, will the benefit of buying eight 
millions of broad cloth, about two or three millions 
cheaper from England than we could manufacture 



236 LIFE OF FRIEDRICH LIST 

it ourselves in the first two or three years, not 
be acquired at the sacrifice of a manufacturing 
power which, if brought up by the aid of a national 
system, would produce for ever twelve times more 
cloth than we import, i.e. 72 millions of broad 
cloth, or after having doubled our population 
and our consumption (after twenty years) 144 
millions ? To justify this view we have only to 
divide the amount of the imported broad cloth, 
(on an average of the last three years 8,000,000) 
amongst the inhabitants of our country, which 
gives, for three-quarters of a dollar, broad cloth 
and woollen goods in general to every individual. 
If manufactures were properly protected and 
labour properly divided, every individual in these 
United States might be as well clothed as he is 
now nourished, and were this the case, every 
individual would at least consume for six dollars 
of woollens a year, which makes a manufacturing 
power of 72 millions a year or of 144 millions 
after twenty years. The present gain in exchang- 
ing matter for matter is about two or three 
millions a year. Such is the difference between 
reasoning according to cosmopolitical principles 
and reasoning according to true sound political 
principles. 

4. There is a general rule applicable to all 
undertakings which has been entirely overlooked 
by the founders and disciples of the cosmopolitical 



AMERICAN POLITICAL ECONOMY 237 

theory, though, upon its being put in practice, in 
the most cases a fortunate success of individual 
as well as national industry is depending. This 
rule is steadiness (3) in prosecuting a certain branch 
ofi.iditstry oner thought necessary and found practicable. 
Every new undertaking is connected with great 
expenses, with mistakes and want of experience 
and of knowledge of a thousand little things in 
manufacturing, in buying and in selling. The 
longer a business is carried on, the more it 
becomes profitable, the more manipulation is 
improved, the more the manufactured articles are 
accomplished, the more and cheaper can be sold. 
This is the reason why we see prosper so many 
men following exactly the line they once entered, 
and why we see so many running aground when 
in the habit of changing often. The same con- 
sequences are to be perceived in national economy. 
There is nothing more pernicious to the industry 
of a nation than events and circumstances which 
affect the productive powers unsteadily, at one 
time raising a certain branch of industry to an 
uncommon height, at another stopping it entirely. 

If such a branch is raised to an uncommon 
height, the business draws capital, (4) labour, and 
skill from others; the uncommon profit raises 
property to an uncommon price; it raises wages, 
it increases consumption and the wants of the 
working people, as well of the undertakers and 



238 LIFE OF FRIEDRICH LIST 

capitalists ; and such a period of uncommon pros- 
perity, if merely momentary and occasional, and 
followed by a period of uncommon decline, effec- 
tuates exactly the opposite extreme ; property falls 
not only, but has no price at all; the labourers 
earn by their habitual business not even the 
necessities of life; capital has no employment, 
houses and machinery fall to ruin ; in short, bank- 
ruptcy and distress are to be seen everywhere, and 
what first seemed to be public prosperity, turns 
out to have been only the first step to public 
calamity. 

One of the first views a nation has to take in 
its economy is, therefore, to effectuate steadiness by 
political measures, in order to prevent as much as 
possible every retrograding step, and^the principal 
means of attaining the end is a judicious tariff. 
As the more a nation effectuates by this means 
steadiness in market and supply, in prices, wages 
and profits, in consumption and wants, in labour 
and enterprise (even promoting the step forward, 
even preventing the fall backwards), the more this 
nation will effectuate the development of its pro- 
ductive powers. 

Mr. Smith, in ascribing the economical pros- 
perity of England (5) to her constitution, to the 
enterprising spirit and laborious as well as parsi- 
monious habits of her people, and in denying the 
salutary effects of the English tariff laws, was 



AMERICAN POLITICAL ECONOMY 239 

entirely destitute of correct views respecting this 
cause of national prosperity. Since the time of 
Kli/nbeth, no English cloth manufactory was 
destroyed, either by a foreign war on English 
ground, or by foreign competition. Every suc- 
ceeding generation could make use of what the 
preceding generation built, and could employ its 
means and powers in improving and enlarging 
those buildings. Look at the contrast in Germany ; 
how far was she advanced in those ancient times, 
and how trifling is her progress in comparison 
with that state of things ; events and competition 
from abroad destroyed, often twice in one century, 
the creation of the former generations, and every 
generation had to begin again from the commence- 
ment. 

Contemplate, sir, in this respect the fate of your 
own country. How often was the manufacturing 
interest, and even the agricultural interest, raised 
by events, and how often depressed again by 
foreign competition to the utmost calamity of the 
country. Contemplate only the period from the 
last war till now. The war made the establish- 
ment of manufactures and the wool - growing 
business necessary and profitable: the peace 
destroyed manufactories and sheep. The war 

I encouraged agriculture, and increased prices of 
produce, wages, and property to an uncommon 

I height : the peace and foreign policy reduced all 



240 LIFE OF FRIEDRICH LIST 

this to such a degree that the farmers, who, during 
the preceding period, had accommodated their 
consumption to their revenue, who made improve- 
ments according to the presumed value of their 
land, etc., were ruined. Now are the manufactories 
again restored to a little animation, but English 
competition is at this moment about to prostrate 
them again. A war, if in the course of time we 
should have one, would undoubtedly enliven them 
again, but peace would destroy them again. And 
in that manner we will go through centuries in 
building up at one time what was destroyed in 
another, and will be destroyed again if we erect 
not by judicious laws, forbearance for securing 
our productive powers (as we erect them for 
securing our territory) against foreign aggressions, 
foreign events, foreign laws and regulations, foreign 
capital, industry, and policy. 

Steadiness alone in protecting the manufactories 
of this country would raise our productive powers 
beyond the conception of the most sanguine. 

A nation exposing its industry to the slightest 
storm from abroad, how can it compete with a 
nation which protects its establishments for all 
futurity ? 

Very respectfully, your most humble, obedient 
servant, 

FR. LIST. 



AMERICAN POLITICAL ECONOMY 241 



NOTES TO LETTER VIII 

Page 229. (i) Tariff system. Cp. the arguments in chaps. 
xxvi., xxvii. of the " National System." 

Page 230. (2) The homt market. The same arguments are 
used in the " National System," chap, xv., " Nationality and the 
Economy of the Nation." 

Page 237. (3) Steadiness. So the " National System," in chap. 
xxiv., " The Manufacturing Power and the Principle of Stability 
and Continuity of Work." 

Page 237. (4) Draws capital. Contrast Letter IV., p. 191. 

Page 238. (5) England. Compare the arguments in the 
M National System," chap, iv., on the sources of English prosperity. 



APPENDIX 

TO 

THE OUTLINES 

or 

AMERICAN POLITICAL ECONOMY 

IN 

THREE ADDITIONAL LETTERS 

ADDRESSED BY 

PROFESSOR FREDERICK LIST 

OF THB UNIVERSITY OF TUBINOBM IN GERMANY 
TO 

CHARLES J. INGERSOLL ESQ. 

VtCC-PUSIDEXT OP THB t-K.HNSVLVANIA SOCIETY WOK TM 
MANUFACTURES AND TUB MECHANIC AITS 



PHILADELPHIA 

PRINTED BY SAMUEL PARKER, No. 48 MAMKT Snuwr 

1827 



APPENDIX 



LETTER IX 

Political Economy is not Cosmopolitical Economy 
(continuation) 

Reading, July 26, 1827. 
DEAR SIR, 

After having read the foregoing letters, 
can you believe that Mr. Canning and Mr. 
Huskisson became convinced of the truth of Mr. 
Smith's and Mr. Say's cosmopolitical theory? No, 
sir, Mr. Canning was as far from being convinced 
of this truth as Pitt was, though the latter (as the 
disciples of Smith assure us triumphantly) was in 
the habit of carrying everywhere along with him 
a volume of Adam Smith's. Mr. Pitt certainly 
carried that volume in his pocket for no other 
purpose than to act quite contrary to the advice 
of the author; and Mr. Canning, it seems, has 
learned these volumes by heart, in order to allege 
the opinions of Adam Smith as often as he intends 
to act contrary to them. This new manner of 



246 LIFE OF FRIEDRICH LIST 

alleging an authority has certainly not been in- 
vented for home use but for export, as a lively man 
of this country (i) wittily observed. 

The more English policy, in this moment, seems 
to be contradictory to itself, and the more the 
mysticalness with which it is covered may become 
injurious to this country ; and on the contrary, the 
more it is necessary for this country to understand 
it plainly as it is, the more I hope to be excused if 
I should fail in my undertaking to unveil it. 

It is indeed strange to see at the same time the 
present Ministry of England hated by the ultras of 
France and Spain, etc., and supported by the King 
of England, beloved by the British people, and 
nevertheless profess a common theory, which, if 
carried into effect, would deprive the English 
nation of the monopoly hitherto enjoyed, and yet 
jealously watch to prevent every progress of other 
rival nations, particularly of the United States. 
There must be everybody feels it some difference 
between sayings and doings. That Mr. Canning is 
a noble, feeling, liberal man who would venture to 
doubt? But nevertheless we know, from his own 
acknowledgment, (2) that he suffered the Spanish 
nation to be given up to three monsters, despotism, 
anarchy, and foreign invasion and occupation, in 
order to call the South American Republics into 
existence. And this deed certainly did not originate 
in disinterested love of freedom and humanity, but 



AMERICAN POLITICAL ECONOMY 247 

a desire, as he confessed himself, to open for 
England immense markets. It is a very liberal 
act, indeed, to provide Portugal with a free con- 
stitution (for that the Emperor of Brazil would 
have given this constitution from his own accord 
nobody can believe), and to hasten with an army, 
on twenty-four hours' notice, to Portugal in order to 
defend this new constitution against the aggressions 
of the fanatics of Spain ; but even if we acknowledge 
the duty of England to support her ally's constitu- 
tion, we see this expedition executed with so much 
haste and zeal, that nobody can doubt there must 
have been a good deal of self-interest in it In this 
movement is Mr. Canning treating for the evacua- 
tion of Spain ? For what purpose? If the monster 
Occupation should leave that country, it will be 
exposed to the monster Anarchy. 

Mr. Canning may give different reasons in 
Europe to the different people for his different 
political measures as it may suit his interest 
But in this country we are at liberty to judge a 
man's intention by his conduct, not according to the 
pretexts he may invent to mask the true motives 
of his actions. We are in the habit of finding out 
at first a man's aim : sometimes we consult history, 
from which we learn that nations, during ages 
and centuries, like individuals, are prosecuting 
some one principal aim. Inquiring after the aim 
of England, we find that it consists in raising her 



248 LIFE OF FRIEDRICH LIST 

manufacture, commerce, and naval power beyond 
the competition of all other nations. For reaching 
this aim we see her support at home liberal 
principles ; play the conqueror in Asia, and use and 
support their despotic powers ; whilst contenting 
herself in the West Indian islands and Canada 
with a paternal Government, mixed and sweetened 
with some rights and some free institutions. We 
see her give the republic of Genoa, her former ally, 
to a monarch, and restore the Hanse Towns to their 
former independence (in order to possess staple 
places in Germany for her manufactures) : we see 
her hire armies against the French Republic, and 
manufacture a free constitution for Sicily : we 
see her subsidize the armies of the European 
monarchies to conquer France, and convert the 
republic of Holland into a kingdom : we see her 
suffer the destruction of a free constitution in 
Spain, call a number of republics into existence in 
South America, project a free constitution for 
Portugal, defend it against the aggressions of the 
fanatics, and treat with France for the evacuation 
of Spain. When we judge this conduct by 
principles, there is nothing but contradiction ; but 
when we look at the aim of the country, there is 
nothing but conformity. Her aim was always and 
ever to raise her manufactories and commerce, and 
thereby her navy and political power, beyond all 
competition of other nations, and always she 



AMERICAN POLITICAL ECONOMY 249 

accomplishes her conduct to circumstances using 
at one time and in one place liberal principles, at 
another, power or money either to raise freedom 
or to depress it, as it suited her. Even her 
measures against the slave trade (3) are said to 
have originated from her interest, and gave her a 
pretext to prevent other nations' colonies from 
supplying themselves, whilst her own possessed 
already the necessary quantity. Can any man of 
sound mind believe this aim of England was 
changed by Mr. Canning, or could be changed, 
even if he had the intention to sacrifice national 
views and national interests for promoting cosmo- 
political views and interests ? No ; Mr. Canning 
has only changed the means of reaching this 
national aim according to present circumstances. 
If it suited the interests of England, fifteen or 
twenty years ago, to subsidize half Europe in order 
to destroy the continental system of Napoleon, 
and to send armies there, the same Powers who 
aided to overthrow the empire of Napoleon having 
now partially revived a continental system them- 
selves, stand at present in the light of her aim, 
threatening not only to destroy the influence of 
English power upon the Continent, but even to 
take their share in the trade with South America. 
There is, consequently, no more use for the 
principles of Lord Castlereagh for England; on 
the contrary, there is now use for such means and 



250 LIFE OF FRIEDRICH LIST 

prices as are calculated to raise the influence of 
England upon the Continent and counteract the 
policy of the continental Powers. Mr. Canning 
gives this pretty clearly to be understood in his 
celebrated speech, in alluding very expressly to 
the gigantic power which England possesses in 
having liberal ideas on the Continent for an ally. 
To give his threatenings the necessary stress, he 
seems to have previously provided Portugal with 
a liberal constitution, in order to gain ground on 
the western extremity of the European continent 
for his new allies, the liberal ideas ; his pre- 
decessor, Lord Castlereagh, first took ground in 
that country with his bayonets and his money, in 
the contest against Napoleon's continental system. 
Whether Mr. Canning has the intention to force 
the continental Powers, by his threatenings, to 
enter into disadvantageous commercial treaties, or 
whether he has the intention to prepare the public 
mind for a contest between absolute power and 
liberal ideas, nobody can tell who is not intimately 
acquainted with the mysteries of cabinets ; but so 
much is certain, that he intends to attain his aim 
either one way or the other. His speech bears 
distinct marks of dissatisfaction with the French 
Ministry, from which we conclude that he must 
have been disappointed by that ministry in a 
darling plan. He was a short time before on a 
visit (4) at the French Court, and it transpired that 



AMERICAN POLITICAL ECONOMY 251 

a treaty of commerce was about to be concluded 
We have some reasons to draw such a conclusion 
from the behaviour of the English newspapers, 
which were at that time uncommonly busy to 
p.aisc the great advantage which the cosmo- 
political system of Smith and Say, if put in practice, 
would have for both nations, in enabling the 
English to go on prosperously with their manu- 
facturing business, and the French to increase the 
vine-planting business. On uttering such feelings 
of dissatisfaction, Mr. Canning acted certainly from 
greater motives than a desire of taking personal 
satisfaction; an English minister would never 
permit himself to express feelings of personal dis- 
appointment, at the risk of affecting by this 
conduct the policy of his nation. The threatenings 
of Mr. Canning were not likely to be misunder- 
stood in France ; and the late request of evacuating 
Spain from French troops shows pretty clearly 
that Mr. Canning has the intention to gain pre- 
liminarily the whole Peninsula for his new ally. 

It is, however, not my intention to treat on Euro- 
pean policy. I only went so far to state generally 
the aim of Mr. Canning's policy, which is to 
counteract the continental Powers of Europe and 
to monopolize the South American market In 
respect to this country, Mr. Canning has not to 
fear a present manufacturing power but a rising 
one, which menaces the interest of the English 



252 LIFE OF FRIEDRICH LIST 

manufacturing power in a threefold way : in the 
first place, in depriving the English manufactures 
of our interior market; secondly, in sharing with 
them the South American market; and thirdly, 
in increasing our internal and external shipping 
immensely, which is the basis of the future 
ascendency of our naval power. There was no 
occasion, and there will perhaps not in the course 
of centuries reappear such an opportunity as the 
event of the emancipation of the South American 
people for raising the manufacturing power of the 
United States, in a few years wonderfully, and 
taking an equal standing in power and wealth 
with England by developing our internal pro- 
ductive powers, and extending our foreign com- 
merce and our internal and external shipping. 
Let only a few years pass and England will have 
taken exclusive ground in the South, and will have 
raised her power and wealth by Mr. Canning's 
policy beyond all conception. There will then be 
no possibility for an American competition with 
England, neither in industry nor in political power. 
On the relations, sir, between two rival nations, 
not to grow in strength and to become weak are 
synonyms. If England grows twice as powerful 
as she is, whilst you remain stationary, you become 
twice as weak as England. It is quite clear that 
Mr. Canning had a great interest to check this 
country in executing a national system. But what 



AMERICAN POLITICAL ECONOMY 253 

means has he to do this? On our own continent 
there is no foe to raise for frightening us. Nothing 
is to be done but to make use of the interest of 
our commission merchants and of the perversity 
of the soi-disant theorists to raise the feelings of 
our shipping merchants and of the Southern 
planters, in deluding them with false demon* 
strations, as if the shipping and cotton-growing 
interest would be depressed for the purpose of 
promoting the individual interest of some manu- 
facturers. We shall see hereafter with what good 
reason this is done, and every man of sound mind 
must be astonished to see such an excitement 
against measures which promote at last all interests. 
Very respectfully yours, 

FR. LIST. 

NOTES TO LETTER IX 

Page 246. (i) Man of this country. In the " National System " 
the epigram is attributed to Chief Justice Baldwin. 

Page 246. (2) Acknowledgment. Sec note on Letter III. p. 180. 

Page 249. (3) Slave trade. This charge is elaborated, with 
some qualifications, in chap, xxxv., of the "National System," 
" Continental Politics." 

Page 250. (4) Visit. In October, 1826. 



LETTER X. 

Political Economy is not Cosmopolitical Economy 
(continuation) 

Reading, July 27, 1827. 

DEAR SIR, 

A nation may become dependent by its 
exports as well as by its imports from other nations, 
and a great source of raw materials and provisions 
to foreign countries may oftener become a source 
of calamity and of weakness in the interior and 
of dependence upon foreign Powers, than of 
prosperity. 

Mr. Canning, aware of the great interest of 
England, to keep down the manufacturing interest 
of this country and to monopolize the South 
American market would, I am convinced, readily 
open the ports of England for our wheat, could he 
persuade the landed interest in both Houses of 
Parliament of the expediency of such a measure. 
It is dubious whether the farmers of this country 
would refuse a momentary gain for a future and 

254 



AMERICAN POLITICAL ECONOMY 25$ 

permanent advantage ; it is probable that Mr. 
Canning would gain by such a measure the landed 
interest of this country for his free-trade theory. 
What would be the consequence of such a 
measure ? The manufactories of this country, left 
at the mercy of free competition, would be 
immediately ruined. The greatest part of all 
capital invested in manufacturing business would 
be lost, and all that would be saved would be 
invested in farming business. Labour, skill, all 
productive powers engaged in manufactures would 
return again to farming business. The price of 
wheat and grain would enhance to i& dollars, the 
price of land and wages would raise in an equal 
proportion, and the farmer would again accord his 
consumption and improvements to the increased 
profits he could make. The banks would increase 
their business in an equal proportion. In the 
mean time England would increase her manufactur- 
ing power immensely, and monopolize the Southern 
and all other markets. This would be well enough, 
had England not in her power to give a mortal 
blow in one hour to this whole industry. Any 
change in the mind of Mr. Canning, or in the 
administration, or in the Government, or in both 
Houses of Parliament, could produce such a 
destructive effect. After having improved her 
manufactures, she would very likely take up again 
the old plan of improving the condition of her land 



256 LIFE OF FRIEDRICH LIST 

proprietors by reviving the corn laws ; a war 
would happen between the two countries, or a 
hostile feeling of a minister could inspire him with 
the plan of weakening the wealth and power of the 
United States, and of disturbing their tranquillity 
and internal peace, by excluding again the American 
grains, and by giving the preference to the produce 
of Prussia, Poland, etc., as it was the case last year 
respecting the English possessions in the West 
Indies. Certain is this, that from the day of such 
an economical dependence the majority of the in- 
habitants of the United States would have to 
tremble before every new opening of the English 
Parliament, having more to fear and to expect from 
the proceedings and regulations in Westminster 
than from those in Washington, and that the in- 
dependence of interests and feelings in the United 
States would be lost. For what would be the con- 
sequence of every check of exports of our grain ? 
What you have seen the last fourteen years a fall 
of wages, of profit, of capital, and of land prices, a 
disproportion between an habitual consumption 
and a diminishing income, between improvements 
and rent, and in consequence, bankruptcy, sheriffs' 
sales, broken banks, and national calamity. Would 
it not have been better if we had not sold a single 
grain of corn to England ? Would it not stand at 
the mercy of a foreigner, of a riot, of a hostile 
power, to break down our national prosperity in 






AMERICAN POLITICAL ECONOMY 257 

one hour, and to throw it backwards for a whole 
country? 

Here, sir, is the proper place to mention an 
intimate connection between our present banking 
system, and the system of our political economy, 
which, I believe, has heretofore been but imper- 
fectly understood. This banking system stands, 
rises, and falls, with the price of land and property. 
Banks issue generally a great deal more notes than 
they possess cash. Mr. Cooper allows them a 
threefold amount of their cash to issue in notes, 
wherefrom I conclude that they at least issue that 
much. If only a third part of these circulating 
notes represent cash, what do the other two parts 
represent ? For, being nothing more of themselves 
than stamped rags, nobody would take them if 
they would not represent anything of value. They 
represent a nominated quantity of money consist- 
ing in the value of property and land. But the 
real value of property and land depends upon the 
market price of land : if that price rises, the security 
of the paper rises; if it falls, the security falls. If 
no price at all can be realized, there is no possi- 
bility to convert property into cash, and the 
security is lost to the holders of the notes, inso- 
much as the bank is founded on land and property. 
The price of land, and the possibility of converting 
it into money, rises and falls with the price of the 
produce. If the price of wheat is high, the price 

s 



258 LIFE OF FRIEDRICH LIST 

of wheat land is high too ; and if the produce will 
scarcely bring so much money as to pay the 
labour, nobody would be so great a fool as to 
give much money for wheat-land. Every cause, 
therefore, which effects a fall of the prices of the 
raw products, effects likewise a fall of the land 
prices and of the country bank business, and vice 
versa. The principal condition of a banking system 
like this is, therefore, steadiness of the market of 
the agricultural products, effectuated by a national 
system, which prevents great fluctuation, which 
can only be attained by securing the home market 
to the products by a manufacturing industry. 
Under this condition, a banking system works as 
a productive power, whilst in an open country it 
destroys from time to time the roots of industry 
CREDIT. Look fourteen years back : had the United 
States Government, immediately after the last war, 
protected manufacturing industry, wheat, wages, 
land prices, profits would never have sunk so low ; 
banks would never have been ruined; not the 
tenth part of the citizens would have been expelled 
from house and home. This distress of so many 
land proprietors arose not chiefly from the bank 
mania, as it was generally believed, but from a 
revolution in the prices of produce and land caused 
by the dependence on foreign markets, foreign 
fluctuations of prices, foreign regulations and re- 
strictions. It may be that swindling bank schemes 



AMERICAN POLITICAL ECONOMY 259 

and the faults of the legislature added to the 
distress; but the effect the ruin of a number of 
land proprietors could not have been prevented 
otherwise than by preventing the chief cause by a 
national system, and this effect will as often return 
as the cause will reappear, even if there is no 
country at all in the United States. A rise of land 
prices, by an uncommon rise of grain prices, will, 
if there is no bank, induce land proprietors to sell 
their land for nominal sums; they will be con- 
tented with receiving a third or a fourth part of 
the purchase money in cash, and for the remainder 
they will readily take judgments and mortgages on 
the property they sold. Men without property, 
and in possession of some cash, will be glad to get 
that way in possession of land, hoping to be able 
to deliver it, by the aid of the high corn prices, 
from the mortgage ; the most part of those who by 
the way of inheritance get in the possession of 
land of which they were only partially owners, 
will engage themselves in such a manner against 
their co-heirs. Others who sell not their land, 
will undertake improvements in proportion to the 
increased value of the land, and enter mortgage 
obligations. If such a state of things only lasts 
for some years, and then breaks at once, it will 
always break the majority of the citizens, and 
destroy the morals, the industry and the credit of 
the country, for half a century. In Germanv 



26o LIFE OF FRIEDRICH LIST 

saw the same effects from the same causes with- 
out country banks. As long as produce, and in 
consequence, land prices were high, there were great 
sales of land; credit increased, a man with com- 
paratively a small sum of money could buy 
high-valued estates, in giving mortgages for the 
remainder. By inheritance, sales, contracts, etc., 
etc., more than the moiety of the country changed 
proprietors, and was mortgaged under the high 
prices. The owner of a mortgage, trusting to the 
steadiness of grain prices and land prices, was not 
anxious to recover his money, and even if he 
wanted money, he asked rarely the debtor for it ; 
he could effect this easier by selling his paper to 
capitalists who desired to empty their money and 
had confidence in the security. But with the 
moment of what was called the rcstauration, with 
the moment of free trade, by which free trade the 
English were allowed to destroy the German 
manufactures, by importing their manufactures, 
and destroy the landed interest of Germany, by 
prohibiting the importation of German grain and 
wool in their country, by corn and woollen bills, 
the prices of land and of property sank, the con- 
fidence in the paper was lost, as well as the 
possibility of recovering the money by selling the 
property, and the same ruin of the majority of 
farmers followed, like in this country. In the 
present moment, the value which can be recovered 



AMERICAN POLITICAL ECONOMY 261 

by selling properties there, amounts not to the 
sum of the mortgages. 

The founders of the cosmopolitical system 
forgot entirely to say anything about the causes of 
the rise and fall of land prices, and about the 
consequences of it This is the more astonishing, 
as the prosperity of the greater part of a nation 
depends upon the steadiness of the prices of land 
and property (which forms the greater part of the 
riches of a nation). The cause of this omission is, 
however, obvious. In those countries in which 
Mr. Smith composed his system, the greater part 
of land property, forming life estates, is not in free 
commerce, and therefore he only perceived altera- 
tions in rents (i) and not in land prices, Mr. Say, 
who lives in a country in which nearly all real 
estates are in free commerce, overlooks the omis- 
sion by blindly following his master, as he always 
does, except in some matters of little consequence. 
In this country there is more exchange in real 
property than in any other, and here we can point 
out a particular deficiency of the celebrated theory, 
which, if overlooked by a nation, may at least once 
in twenty-five years break down the land-proprietor 
of a country. Indeed, the more I advance in 
developing the principles I expressed in my former 
letters, the more I am inclined to declare Mr. Say's 
system a total failure, calculated rather for destroy- 
ing common sense in political economy and the 



262 



LIFE OF FRIEDRICH LIST 



prosperity of those nations who contemplate its 
hollow phrases as profound wisdom. 

Very respectfully yours, etc., etc., 

FR. LIST. 



NOTE TO LETTER X 

Page 261. (i) Mr. Smith . . . rents. But see the passage Book 
II. chap, iv., on "The Ordinary Market Price of Land." Say also 
in his " Principes," Book II. chap, ix., discusses the price of land 
in relation to rent and profit. 



LETTER XI 

Political Economy is not Cosmopolitical Economy 
(continuation) 

Reading, July 29, 1827. 

DEAR SIR, 

As a foreign grain market which may be 
destroyed every day by the regulations of a foreign 
Power is rather a source of weakness than of 
power, so it is with a foreign cotton market 
depending on a country which, like England, by 
its predominant political power is enabled, and by 
its rival feelings against this nation induced, to 
procure its supply after a short time from other 
subjected countries. The Southern orators would 
certainly do better to call their fellow-citizens to 
stand by their reason instead of by their arms, and 
they will certainly do it if they investigate the 
subject coolly and deliberately. 

In the first place, let us see who is the silly boy 
who killed the goose laying golden eggs, whom an 
eminent statesman of the South toasted late so 
emphatically. I am obliged to refer for that pur- 
pose to what President Cooper is delighted to 



264 



LIFE OF FRIEDRICH LIST 



style "the annual nonsense of finance reports" 
from which I nevertheless venture to draw some- 
thing of tolerably good sense. The tables of the 
Treasury give the following result : 

EXPORTS. 

Dollars. 

1816. 81 millions of pounds of raw cotton brought 24,000,000 
1826. 204 25,000,000 

Two and a half pounds brought consequently in 
1 826 just as much as one pound in 1816, because 
Europe could not digest the number of cotton 
bales which the Southern States gave her to 
swallow. Had every planter thrown the half of 
his cotton crop into the Mississippi he would un- 
doubtedly have received as much money for the 
other half as he now got for the whole, and he 
would besides have saved the trouble of bagging 
one-half the number of bags. So true is it that 
men may labour for nothing, and that a productive 
power may destroy itself, and that a production 
which is beneficial to mankind may be destructive 
for a particular country ; so true is it that individual 
economy is not political economy, and political not 
cosmopolitical economy. The planter receiving in 
1825 very small interest for his capital on account 
of the low cotton prices, thought to make up this 
loss by increasing the quantity of his crop, which 
was very good individual economy. But all planters 



AMERICAN POLITICAL ECONOMY 265 

had the same plan; the quantity of the whole 
cotton crop consequently increased in the MM 
proportion, whilst the demand in the European 
markets had but little increased ; the prices fell in 
consequence in the same proportion in which the 
quantity had increased, and the planters received 
not a cent, more for their increased quantity than 
in the preceding year. We see here in clear 
numbers that, if in material production twice two 
makes four, it may make in production of value 
sometimes one and a half, or something less ; and 
I venture to predict that the cotton planters will 
every year produce this result, and that they will 
at last plant three hundred millions of pounds, 
and not receive more than twenty-five millions, 
or something less, until they perceive that every 
supply must correspond to the demand. Accord- 
ing to cosmopolitical principles, it matters not, 
however, how much the cotton planters cleared 
by their industry. The riches of the world were 
increased, and all is well. But I incline to doubt 
whether the Southern planters would not prefer 
to lessen the comforts of mankind a little by in- 
creasing their private income. 

The cause of the great disadvantage from which 
the Southern States now are suffering, is just 
the same cause which depresses the grain-growing 
states ; these raise too much grain, those too much 
cotton. Both want a proper division of labour 



266 LIFE OF FRIEDRICH LIST 

There and here a part of the inhabitants must seek 
for another, for a more profitable employment. This 
is the whole secret for improving both countries. 

But what else can the Southern States do with 
their slaves in a profitable manner? Some say 
they ought to raise silk ; others to plant vines. I, 
for my part, believe that neither the one nor the 
other would yield, for the present, a sufficient 
profit to supply their losses, which opinion I shall 
qualify in another place. But why should they 
not be able to make coarse cotton (coarse shirtings, 
ginghams, etc.)? I cannot see the reason why 
not. After the machineries are erected, the labour 
of spinning and weaving coarse cotton certainly 
exceeds not the faculties of the slave. The Pacha 
of Egypt does very well in applying his slaves to 
this kind of work ; and the ancient Greeks carried 
on all their manufacturing with slave labour. After 
having started the machineries, the inhabitants of 
the South would even enjoy peculiar advantages : 
first, they could apply their labourers from the 
prime of their youth to a certain branch of busi- 
ness, and their skill would be secured to the manu- 
factory for their whole lifetime; secondly, for the 
spinning mills they could turn the labour of the 
females and of the children, who are now of very 
little use for them, to a better account; thirdly, 
they would have the cotton cheaper, and the South 
American market nearer ; fourthly, they could dye 



AMERICAN POLITICAL ECONOMY 267 

with home-raised colour-plants, particularly indigo, 
without any preparation. 1 

Let us see what the result would be if with the 
fourth part of their cotton-planting slaves they 
would only convert the eighth part of their cotton 
into coarse goods. 

Ib*. 

They plant now 204,000,000 

For employing the fourth part of their slaves in 
coarse cotton manufactories they will plant 
less raw cotton ... 51,000,000 



Remainder ., 



... 153,000,000 



From this quantity they work themselves up 

one-eighth 20,000,000 

Remainder 



For this reduced quantity they will receive, ac- 
cording to the quantity and price of 1820 
(when they sold 127,000,000 Ibs. for 22} 
millions of dollars) 

And 20,000,000 Ibs., manufactured at 3^ 
millions, and the value six times increased 

Total ... ... 

Instead of twenty-five millions a year. 



Dolkn. 



24,000,000 



21,000,000 
45,000,000 



Thus the whole manufacturing labour would 
be clear gain, and though not more than the fourth 

1 On that important subject, how to use slave-labour in manu- 
facturing, I will expose my opinion in a particular letter, (i) 



268 



LIFE OF FRIEDRICH LIST 



part of the cotton-planting labour, it would yet 
bring nearly as much as the other three-fourths. 
By this the Southern planters may learn that they 
receive for all their slave-holding trouble, and all 
their land, not the twentieth part of the value that 
may be produced in Europe from their raw cotton. 
Verily, verily, the Southern planters will, as well 
as the French ultras, fail of their aim in resisting 
the wants of the present time obstinately, instead 
of complying with them reasonably. The good 
old times are not to be revived otherwise than 
by good new ideas, carried into effect by standing 
at machinery, not by aims. 

Whilst the Southerns destroy the fruits of their 
labour by self-competition, it is quite certain that 
England is looking about for supply to other 
countries, standing more under their command 
than the United States. They intend to encourage 
Brazil and other South (American states in this 
business. The downfall of the Turkish Empire, 
which in all probability if not overthrown from 
abroad must sink under its own weight, will 
moreover bring v.ast cot,ton countries under their 
suzerainte. In such a case they probably aim at 
Egypt and Minor Asia, not only in this respect, 
but to get the key to the Red Sea and consequently 
to East India. The example of the Southern States 
itself teaches that with the aid of slaves and of 
a proper soil a country may increase its cotton 



AMERICAN POLITICAL ECONOMY 269 

immensely. Then they will more and more 
exclude American cotton, and place the Southern 
States with their cotton bills in the same situation 
as they did the grain and wool-growing countries 
with their corn and wool bills. 

The calamity arising from such a measure can 
only be avoided by taking precaution in due time. 
In her present situation England cannot dispense 
with American cotton, she must buy it. By 
commencing now to raise a cotton manufacturing 
industry the South will by-and-by diminish the 
quantity of raw cotton and increase home manu- 
factories. 

Whilst they gain thus in a double way, they 
will moreover secure their cotton market in 
England. This is effected in the following manner : 
if the Americans raise cotton manufactories they 
will rival in foreign countries the English manu- 
factories ; should then the English exclude or 
exonerate the importation of American cotton, 
the prices of raw cotton would be raised in their 
countries and the American cotton manufactories 
could sell cheaper in foreign countries. This is 
yet the greatest of all advantages which will grow 
out of an American manufacturing industry for 
the Southern States, that they place by this 
measure England in a dilemma which cannot fail 
in one case or in the other to turn out to their 
advantage, whilst in following their old course 



2/0 LIFE OF FRIEDRICH LIST 

they will be lost in every way either by their 
own over-production, or by foreign measures. 

Mr. Niles, in his excellent essay on American 
Agriculture, has with good reason shown that the 
Southern States would yet receive some millions 
less for their cotton in Europe, were it not for the 
home manufactories, which already consume the 
quantity of 60 millions of pounds a year. This 
quantity has been questioned by some opponents 
of domestic industry, but, I am confident, with 
little reason. According to the statements of the 
Count de St. Crique, Director of the French 
Customs, the consumption of France last year 
was not less than 30 millions of kilograms, or 64 
millions of pounds, and the consumption of the 
preceding year was not more than 24 millions of 
kilograms, or 48 millions of pounds ; the consump- 
tion of France had consequently increased in one 
year 16 millions of pounds. This consumption 
makes for each inhabitant two pounds a year. 
But in France, where everybody wears linen for 
shirts, etc., cotton is not half so much in use as 
in the United States : we cannot, therefore, at 
least estimate the average consumption at four 
pounds per head, which would make a quantity 
of 48 millions without exports. 

I regret very much that I am not in possession 
of the statistical tables of England, from which I 
could derive the internal consumption of that 



AMERICAN POLITICAL ECONOMY 271 

country. The total import of raw cotton was 
estimated last year at 200 millions, from which 
quantity certainly two-fifths arc consumed in 
England. According to this example, France may 
increase her consumption in the course of the 
next ten years to 100 millions of pounds, and so 
may the United States, which would make nearly 
the double of the quantity we sell at present to 
England. The interior of Germany and Switzer- 
land, which begin to supply themselves by the 
way of Havre de Grace, (2) will increase in an 
equal ratio their consumption. In the mean time, 
while these markets increase their demand, England 
cannot do without American cotton, and conse- 
quently nothing can be lost, while all may be 
gained. France is neither in possession of an 
overwhelming naval power, nor has she the aim 
to inundate the world with her manufactures ; she 
will ever be a good and sure market for American 
cotton. There are strong reasons to believe that 
France would readily increase the importation of 
other products from the United States, particularly 
tobacco, ham, lard, and tallow, if the United States 
would take proper measures to increase their 
importation from France. The true policy of this 
country respecting England and France has 
certainly too long been neglected. The United 
States acquired their political independence by 
separating from England and by uniting with 



272 LIFE OF FRIEDRICH LIST 

France, and in that way only in that they can 
acquire their economical independence. 

Very respectfully yours, 

FR. LIST. 



NOTES TO LETTER XI 

Page 267. (i) A particular letter. No trace of this letter remains, 
although List himself, in the preface to the " National System," 
speaks of " the twelve letters in which I expounded my system/' 

Page 271. (2) Havre de Grace. Whence List sailed in 1825. 



KXTRACT FROM PROFESSOR LIST'S 
SPEECH 

At a dinner given to him by the Pennsylvania Society for the 
Encouragement of Manufactures at the Mansion House, Phila- 
delphia, November 3, 1827. 

I:\HAUSTED by persecution, the bitter fruit of 
a constitutional struggle for the welfare of my 
native country invited by that illustrious man 
who has filled two hemispheres with his military 
glory and three ages with his civic virtues I 
reached the happy shores of freedom early enough 
to witness the greatest spectacle the world ever 
saw. I was present at his triumphal entry into 
Albany, and into this celebrated city, when he 
traversed the beautiful fields of Lancaster and 
the magnificent Hudson, hailed by hundreds of 
thousands. I heard the shouts of a grateful nation 
in our modern Tyre on that ever-memorable cele- 
bration of American Independence. I saw the 
tears of grief when a free nation's first magistrate 
spoke that classical production of genius and 
exalted feeling on the day of his departure. 
Such was my motive for coming and such my 
introduction into this great country, where heroes 

* T 



74 LIFE OF FRIEDRICH LIST 

are sages and sages rulers ; where for the first 
time a great empire was founded on industry, on 
equal rights, and on the moral force of the citizen ; 
where the Governments are mere committees of 
the people, and conquests made for no other 
purpose than a participation in freedom, civilization 
and happiness with the conquered. To have con- 
tributed in the least degree to a work of such 
greatness I estimate to be the highest praise, 
worthy a lifetime of exertions. 

It fell to my lot, gentlemen, to cultivate the 
political sciences, particularly the economy of 
nations, and more than ten years since I began to 
doubt the infallibility of the dominant theory and 
to discover its errors. When I came here I found 
the common sense of the nation struggling against 
those scholastic errors ; and perceiving an oppor- 
tunity to make myself useful to your great com- 
munity, I lost no time in acquiring sufficient 
knowledge of its commercial policy and its internal 
resources and wants. Diffident, however, as I was, 
in my ability to speak in public and to write a 
language I never wrote before, my plan was con- 
fined to a scientific work, which I intended to 
publish after having properly matured it. But the 
generous patronage of the gentleman in the chair, 
whose popularity and high standing in society is 
equal to his brilliant talents, and his truly American 
patriotism determined me to publish thus early 



and thus abruptly the outlines of my system. It 
would be a silly undertaking to assail celebrated 
men merely to bring an unknown name before the 
public, but if such men endanger by their scholastic 
errors a nation which is the hope of mankind, I 
consider it a crime against the human family to 
remain silent even if our talents should not answer 
our intentions. We intend not to detract from the 
merits of Adam Smith in expressing our opinion 
that he did not observe the fundamental distinction 
between political and cosmopolitical principles ; 
that he did not do justice to the influence of the 
moral and intellectual riches or material riches, 
and vice versa, nor to the causes of the increase and 
diminution of the productive powers ; that he created 
a vague term under the name of capital, by the use 
of which he committed immeasurable errors ; that 
he overlooked entirely matters of the first impor- 
tance in practice, such as the causes of the rise and 
fall of the prices of land ; that whilst he treats 
detached matters with great ingenuity and experi- 
ence, his system, considered as a whole, is so con- 
fused and distracted, as if the principal aim of his 
books were not to enlighten natives, but to confuse 
them for the benefit of his own country ; and that, 
in short, his system of political economy is, in our 
days, just of as much practical value for this and 
every other nation as the printing apparatus of 
Faust would be for one of our printers. We intend 



276 LIFE OF FRIEDRICH LIST 

not to blacken the merit of the great inventor of 
the black art if we maintain that his apparatus has 
only an antiquarian value. In respect to Mr. Say 
I have only to add that he adopts all the truths and 
nearly all the errors of his predecessor, and that 
his principal merit is to have clothed both, by a 
superior talent, in the brilliant garment of a fine 
style, and arranged them in a new order, very 
pleasant to those who prefer an apparently logical 
system to plain truth. That he intermeddled 
neither with facts nor with numbers we cannot 
contemplate as an improvement. But Mr. Say 
likes no facts; he is almost an enemy to facts; he 
banishes them to a particular literary apartment 
called statistics, not to be troubled by them, and 
with the few he alleges he is tolerably unfortunate. 
I trust, gentlemen, America will make a system 
of political economy of her own, and for herself, 
and send the books of the founders of the pseudo- 
cosmopolitical system to the Westminster Abbey 
of the science, to take henceforth an honourable 
standing in its history by the side of Quesnay and 
his adherents, who, in their time, flourished too, 
brilliantly for a considerable time, but were at last 
dethroned by Mr. Smith and his disciples. This 
country is not likely to be duped out of its pros- 
perity by empty names and barren systems. Your 
wise fathers, too, gentlemen, ventured, in spite of 
the united wisdom of Rousseau, Voltaire, and 



PROFESSOR LIST'S SPEECH 377 

Montesquieu, and of English philosophers of equal 
celebrity, who maintained that a democratic govern- 
ment was only practicable in a city, or in a small 
territory, to make a large one, yes, a whole system 
of republics; and behold! they succeeded admir- 
ably well, and the splendour of the book wisdom 
of these great philosophers has vanished before 
the lustre of the common sense of your fathers, 
and you, their sons, may now reverse the old 
axiom and say, a democratic government is only 
possible in a large country : so the fathers did, and 
so with the sons American common sense will 
build up a system of political economy in spite of 
all foreign book wisdom ; but it will not request 
for that purpose the patronage of the Pharisees 
and scribes of the age, who are turning at all time 
in a circle of learned errors decorated by high- 
sounding names. Our business is with the people. 
We will speak to the people the language of the 
people, and the people will understand us, and we 
will have a verdict of the people. 

For Mr. Say's popularity with the Liberals in 
France there are particular reasons. Opposing 
strongly the prodigality of government, recom- 
mending public parsimony, censuring public vices, 
he teaches the doctrine of the Liberals, and is 
considered, and justly considered, as one of their 
most prominent defenders among the theorists. 
In their view he has undoubtedly great merit 



278 LIFE OF FRIEDRICH LIST 

with his Liberal countrymen. As to his " laissez- 
faire" theory, it is considered there is a harmless 
fancy sanctioned by the opinion of the great Adam 
Smith. . . . For, gentlemen, unanimous as are the 
French theorists in their doctrine, the French people 
and the French statesmen are fully convinced that 
the present protective system has raised France 
to that high degree of power and wealth on which 
she now stands, and that the free trade theory 
would carry France to ruin. ... I called the 
dominant school the pseudo-cosmopolitical, and I 
believe not without good reason. The whole 
nature and tendency of this union being cosmo- 
political, she certainly will never shrink from true 
cosmopolitical principles. She assuredly would 
be the first country in the world to form a true, 
upright, and well-warranted union of all nations 
for free, unrestricted commerce throughout the 
whole world. But is mankind ripe for such a 
union? The first condition of it should be to 
remove the restrictions, not merely to talk about 
free trade and to act quite contrary ; the second, 
that all naval Powers, by burning their fleets, 
should give a pledge of their sincerity. Is it to be 
expected that the English ever would agree to such 
conditions ? Never. We call, therefore, the free 
trade theory the pseudo-cosmopolitical, because it 
has, in the present condition (i) of the world only 
its existence in books and speeches, not in reality 



PROFESSOR LISPS SPEECH 279 

because those who profess it never think, and 
never will think, of executing it, and those who 
execute it must unavoidably become the sacrifice 
of their credulity, of their inexperience, of their 
ignorance. As all hopes of the true cosmopolites 
rest on the success of the United States, and as 
the United States certainly never could succeed 
in following a cosmopolitical system when men 
and things are not yet ripe for it, their aim would 
be ultimately lost by such premature engagements. 
A Yes, gentlemen, it is my firm belief that in after j 
ages this country will proclaim cosmopolitical 
principles, but true not simulated ones, f When 
the United States shall count a hundred millions 
of inhabitants in a hundred states; when our 
industry will have attained the greatest perfection, 
and all the seas will be covered with our ships; 
when New York will be the greatest commercial 
emporium, and Philadelphia the greatest manu- 
facturing city in the world; when Albion, in 
industry and wealth will be nearly equal to 
Pennsylvania, and no earthly power can longer 
resist the American Stars, then our children's 
children will proclaim freedom of trade throughout 
the world, by land and sea. Who will reproach 
us with having thus painted a visionary futurity? 
Do you not possess all those means which made 
England the greatest country in the world in a 
higher degree and perfection, you Americans? 



2So LIFE OF FRIEDRICH LIST 

Arc you not blessed with treasures of nature and 
with gifts of mind like those Islanders, you 
Pennsylvanians ? And where is there within your 
limits a single one of those causes to be found 
which, in that island, with all its immense riches, 
moral, intellectual, and physical, produce and accu- 
mulate their masses of pauperism, of vice, and 
of ignorance. 

I must confess, however, that the present con- 
dition of this union presents a very striking 
contrast with such great prospects. Often when 
I contemplate the present state of things, I cannot 
help remembering olden times, when the Spanish 
adventurers came to this Western world for barter- 
ing with the aborigines. It seems to me as if the 
nature of commerce since that time had not altered 
much. An English ship is below, your population 
run to the wharfs, they are offered fine clothing, 
frippery, baubles for sale; they offer bread, corn, 
and many useful things in exchange ; but the 
foreigners do not like those things ; they ask you 
for small, round, bright, yellow-looking pieces of 
metal ; your people give all they have but, alas ! 
their stock ran out, their power is gone. . . . The 
"laissez-faire" men will reply to this splendid 
exposition, 1 that all these results were attained in 
spite and not in consequence of the protecting 
system. They deny the daylight in face of the sun. 
1 Of the benefits of protection in France since 1812. 



PROFESSOR LIST'S SPEECH 281 

But we, gentlemen, can give a double counter- 
evidence. What was our condition in 1814 in 
comparison with France ? We were rich, and they 
were exhausted; we bought cheap manufactures 
from England, and they bought none ; we are now 
exhausted and they are rich. Again, what was 
Germany thirty years ago, and what was France ? 
Germany, industrious and wealthy, exported all 
kinds of manufactures to all parts of the world ; 
France, without flourishing industry, received im- 
mense masses of manufactures from there. Ger- 
many bought cheap from every country, and 
ruined her immense productive powers, and 
France, exports at present masses of manufactures 
to Germany, a country now degraded in such a 
degree that her ingenious and persevering sons 
export nothing but inventions to seek for reward 
and protection in Paris and London, and books, by 
which other people may learn how to become rich. 
France, after having been conquered by the sword, 
conquered Germany a second time by the power- 
loom. England takes nothing from her in exchange 
for immense quantities of manufactures but rags, 
on which to print their cosmopolitical principles, 
and bones from her battlefields to manure her soil 
No, gentlemen, France attained those splendid 
results in aid of her protecting system, but in 
spite of heavy taxes, in spite of a government 
which depresses more and more her freedom and 



282 LIFE OF FRIEDRICH LIST 

the rights of her people, in spite of a low state of 
popular instruction. This people paid nearly one 
thousand millions of francs a year, or two hundred 
millions of dollars, a sum which surpasses twice the 
amount of all your exports and imports, and of which, 
not the fifth part is spent for the common welfare, 
whilst your trifling taxes are applied altogether 
for the real wants of the community. Mr. Dupin (2) 
reckons one subscriber of a newspaper for every 
427 inhabitants, and that two Frenchmen amongst 
five can read ; in this country it would be a hard 
task to find a white inhabitant above the first stage 
of infancy who cannot read, and I live in a county 
of about 50,000 inhabitants, where there were at 
the beginning of the present year six newspapers 
with six thousand subscribers, making eight 
persons for every subscription. Mr. Dupin com- 
plains that individual rights in France are restricted 
to such a degree that the citizens are not even 
permitted to meet for deliberating on their common 
wants and wishes. We in this country had not 
long ago the great spectacle of beholding, on 
motion of your high-minded and efficient society, 
the people of fourteen states meet in their respec- 
tive counties in their states, and lastly, in a 
national Convention for discussing the causes and 
the remedies of the present depression of our 
national industry. A protective system is evidently 
equally beneficial to all states and all parties, and 



PROFESSOR LIST'S SPEECH 283 

that the opposition against it is cither founded in 
fafse fears, false principles, or in the efforts of 
orators and writers who, feeling the weakness of 
their cause, make up by a passionate language 
and personalities what is wanting in reason and 
truth. As the language of these writers is not 
that of the Southern people, so their sentiments 
are not those of the noble-minded planters of the 
South. Compare, gentlemen, the Charleston 
memorial with Mr. Cooper's Columbia speech, and 
you will find the former to be an erroneous com- 
position of cosmopolitical principles, destitute of 
facts and without foundation, but decent, peaceable, 
and respectful, whilst the language of the latter 
will remind you of the speeches of those violent 
clubs which render our recollections of the French 
revolution so painful. What a lamentable sight 
to behold men, who in former times merited well 
of their country, instead of resting on their laurels, 
or of fulfilling their duties of teaching the youth 
how to promote the growth and prosperity of 
their country, go abroad to excite the feelings of 
the people by inflammatory addresses, and assail 
from their chairs at home the worthiest statesman! 
I allude here to Mr. Cooper's lectures on political 
economy, where he represents, in the school- 
masterly tone of Mr. Say, the present Secretary 
of Treasury (3) as not having learned during his 
ambassadorship at London, from Mr. Canning and 



384 LIFE OF FRIEDRICH LIST 

Huskisson, cosmopolitical principles, whilst all 
those who are friendly to American prosperity, 
estimate the Finance Report of this gentleman 
as a worthy counterpart to Hamilton's celebrated 
work, and congratulate the country on having a 
statesman at the head of the Treasury, who had 
opportunity and talent to penetrate the mysteries 
of the English commercial policy, and who sacrifices 
not the welfare of his country for the vain glory 
of following false book wisdom. I seize, gentle- 
man, this occasion to express respectful feelings 
towards this exalted character for the kind reception 
he gave me when he was ambassador in London. 
The proceedings of the convention at Harrisburg, 
and its luminous reports will not fail to convince 
the South of the propriety of the American 
system. Virginia, high-minded Virginia, the cradle 
of the great founder of this union, and of three 
illustrious presidents, will give a magnanimous 
example. Virginia how can she henceforth call 
on the name of her great son, if she should be 
selfish enough to support a system contrary to 
the future greatness of his work? How weak the 
opposite cause is, she may learn from the reasons 
they allege, of which the principal is a a want of 
constitutional power. 

Gentlemen, if the clear words of the constitution 
are not sufficient, we will show them the proceed- 
ings of Congress in 1789, when the principal 



PROFESSOR LIST'S SPEECH 2*5 

framcrs of the constitution were members, when 
everybody acknowledged that Congress had the 
power and were in duty bound to protect manu- 
facturers and nobody protested We will read 
to Virginia the speeches of her illustrious Madison, 
when he, who may be called the father of the 
constitution, spoke and acted, in 1789, as you do 
now. We will show to South Carolina, that her 
inhabitants were the first who memorialized Con- 
gress for prohibiting measures ; and to New York, 
that the second petition of that tendency came 
from her citizens. We will remind the Southern 
States in general, that they admonished, in 1789, 
the New England States (then in respect to the 
high duty on molasses, in the same spirit of 
opposition in which the South is now) with regard 
to the principle of "general welfare" and " national 
unify " which they now assail. We will lastly show 
them the great example of the immortal Washington, 
who by wearing a homespun cloth on the day of his 
inauguration, in 1789, in that simple and (xf>rc3sfot 
manner which was so peculiar to that great man, 
taught a never-to-be-forgotten lesson to all his successors, 
and to all future legislators, how to promote the prosperity 
of the country. 






286 LIFE OF FRIEDRICH LIST 



NOTES TO PROFESSOR LIST'S SPEECH 

Page 278. (i) TJie present condition. Hamilton, "Report," 
p. 26. " The United States are to a certain, extent in the position 
of a country precluded from foreign commerce. They can indeed, 
without difficulty, obtain from abroad the manufactured supplies of 
which they are in want ; but they experience numerous and very 
injurious impediments to the emission and vent of their own S\ 

commodities." 

Page 282. (2) Baron Charles Dupin, a celebrated French 
statistician, b. 1784. He published in 1827, "Forces productive et 
commercielles la France." 

Page 283. (3) The present secretary. Richard Rush. 



SO 

for 
ft 

a 
ha 






INTRODUCTION TO THE "NATIONAL 
SYSTEM OF POLITICAL ECONOMY" 

IN no branch of political economy is there such a 
divergence of opinions between theorists and 
practical men as in regard to international com- 
merce and commercial policy. At the same time, 
there is no question within the scope of this 
science which is of so much importance, not only 
for the prosperity and civilization of nations, but 
also for their independence, power, and continued 
existence. Poor, weak, and barbarous countries 
have become, mainly as a result of wise com- 
mercial policy, empires abounding in wealth and 
power, while other countries, for opposite reasons, 
have sunk from a high level of national importance 
into insignificance. Nay, in some instances nations 
have forfeited their independence and political 
existence mainly on account of a commercial 
policy which was unfavourable to the development 
and encouragement of their nationality. In our 
own days, more than ever before, these questions 
have awakened an interest far greater than that 
felt in any other economic problems. For the 

287 



288 LIFE OF FRIEDRICH LIST 

more rapid the growth of a spirit of industrial 
invention and improvement, of social and political 
reform, the wider becomes the gap between 
stationary and progressive nations, and the more 
dangerous it is to remain on the further side. If 
in the past centuries were required for Great 
Britain to succeed in monopolizing the most im- 
portant manufacture of those days, the wool 
industry, later decades were sufficient in the case 
of the far more important cotton industry, and in 
our own time a few years' start enabled her to 
annex the whole linen industry of the Continent 

And at no former date has the world seen a 
manufacturing and commercial supremacy like that 
which in our own day, endowed with such im- 
mense power, has followed so systematic a policy, 
and has striven so hard to monopolize all manu- 
factures, all commerce, all shipping, all the chief 
colonies, all the ocean, and to make the rest of the 
world, like the Hindus, its serfs in all industrial 
and commercial relations. 

Alarmed at the effects of this policy, nay, 
rather forced by the convulsions which it pro- 
duced, we have lately seen a country whose 
civilization seemed little adapted for manufacturing, 
we have seen Russia seek her salvation in the 
system of prohibition so much abhorred by 
orthodox theory. What has been the result? 
National prosperity. 



INTRODUCTION TO NATIONAL SYSTEM 289 

On the other hand, North America, which was 
attaining a high position under protection, was 
attracted by the promises of the theory, and in- 
duced to open her ports again to English goods. 
What was the fruit of free competition? Con- 
vulsion and ruin. 

Such experiences are well fitted to awake 
doubts whether the theory is so infallible as it 
pretends to be ; whether the common practice is 
so insane as it is depicted by the theory ; to arouse 
fears lest our nationality might be in danger of 
perishing at last from an error in the theory, like 
the patient who followed a printed prescription 
and died of a misprint ; and to produce a suspicion 
that this much-praised theory may be built like 
the old Greek horse, with vast womb and lofty 
sides, only to conceal men and weapons and to 
induce us to pull down our walls of defence with 
our own hands. 

This much at least is certain, that although the 
great questions of commercial policy have been 
discussed by the keenest brains of all nations in 
books and legislative assembles, yet the gulf 
between theory and practice which has existed 
since the time of Quesnay and Smith is not only 
not filled up, but gapes wider and wider each year. 
And of what use is a science to us, if it throws no 
light on the path which practice ought to follow. 
Is it rational to suppose that the intellect of the 

u 



290 LIFE OF FRIEDRICH LIST 

one party is so immeasurably great that it can 
apprehend the nature of things perfectly in all 
cases, while that of the other party is so weak that 
it is unable to grasp the truths which its opponents 
have discovered and brought to light, so that 
through whole generations it considers manifest 
errors as truths ? Should we not rather suppose 
that practical men, even if they are as a rule too 
much inclined to keep to the beaten track, still 
could not oppose the theory so long and so stub- 
bornly if the theory were not opposed to the nature 
of things ? 

In fact, we believe that we can prove the re- 
sponsibility for the divergence between the theory 
and practice of commercial policy to rest as much 
with the theorists as with the practical men. In 
questions of international trade, political economy 
must derive its teaching from experience, must 
adapt its measures to the needs of the present 
and to the particular circumstances of each nation, 
without neglecting the claims of the future and 
of mankind as a whole. Accordingly it founds itself 
upon philosophy, politics, and history. 

Philosophy demands, in the interests of the 
future and of mankind, an even closer friendship 
among nations, avoidance of war as far as possible, 
the establishment and development of international 
law, the change of what we call the law of nations 
into the law of federated states, freedom of 



INTRODUCTION TO NATIONAL SYSTEM 191 

international intercourse, both in intellectual tod 
material things ; and, finally, the alliance of all 
nations under the rule of law that is, a universal 
union. 

But politics demands, in the interests of each - 
separate nation, guarantees for its independence 
and continued existence, special regulations to help 
its progress in culture, prosperity, and power, to 
build its society into a perfectly complete and 
harmoniously developed body politic, self-contained 
and independent. History, for its part, speaks 
unmistakably in favour of the claims of the future, 
since it teaches how the material and moral welfare 
of mankind has grown at all times with the growth 
of their political and commercial unity. But it 
also supports the claims of the present and of 
nationality when it teaches how nations which 
have not kept in view primarily the furtherance 
of their own culture and power have gone to ruin ; 
how unrestricted trade with more advanced nations 
is certainly an advantage to every nation in the 
early stages of its development, but how each 
reaches a point when it can only attain to higher 
development and an equality with more advanced 
nationalities through certain restrictions on its 
international trade. Thus history points out the 
middle course between the extreme claims ofy 
philosophy and politics. 

But the practice and theory of political economy 



292 LIFE OF FRIEDRICH LIST 

in their present iorms each takes sides with a 
faction, the one supporting the special claims of 
nationality, the other the one-sided demands of 
cosmopolitanism. 

Practice, or, in other words, the so-called mer- 
cantile system, commits the great error of main- 
taining the absolute and universal advantage and 
necessity of restriction, because it has been advan- 
tageous and beneficial to certain nations at certain 
periods of their development. * It does not see 
that restriction is only the means, and freedom 
is the end/' Looking only at the nation, never at 
the individual, only at the present, never at the 
future, it is exclusively political and national in 
thought, and is devoid of philosophical outlook or 
cosmopolitan feeling. The rulin^theory, on the 
contrary, founded by Adam Smith on the dreams 
of Quesnay, has in view only the cosmopolitan 
claims of the future, indeed of the most distant 
future. Universal union and absolute freedom of 
international trade, which at the present time are 
a cosmopolitan dream only to be realized perhaps 
after the lapse of centuries, can (according to the 
theory) be realized at the present time. It does 
not understand the needs of the present and the 
meaning of nationality in fact, it ignores national 
existence, and with it the principle of national 
independence. In its exclusive cosmopolitanism, it 
considers mankind only as a whole, and the welfare 



INTRODUCTION TO NATIONAL SYSTEM 393 

>f the whole race, not caring for the nation or 
lational welfare, it shudders at (i) the teachings of 
politics, and condemns theory and practice as mere 
worthless routine. It only pays attention to history 
when the latter agrees with its own one-sided view, 
but ignores or distorts its teaching when it con- 
flicts with the system. Indeed, it is forced even 
to deny the influence of the English Navigation 
Acts, the Methuen Treaty, and English commercial 
policy in general, and to maintain a view entirely 
contrary to truth that England has reached wealth 
and power not by means, but in spite of, its com- 
mercial policy. 

When we realize the one-sided nature of each 
system we can no longer wonder that the practice, 
in spite of serious errors, was unwilling and 
unable to be reformed by the theory. We under- 
stand why the theory did not wish to learn 
anything from history or experience, from politics 
or nationality. If this baseless theory is preached 
in every alley and from every house-top, and with 
the greatest fervour among those nations whose 
national existence it most endangers, the reason 
is to be found in the prevailing tendency of the 
age towards philanthropic experiments and the 
solution of philosophical problems. 

But for nations as for individuals, there arc 
two efficacious remedies against the illusions of 
ideology experience and necessity. If we are not 



2)\ LIFE OF FRIEDRICH LIST 

mistaken, all those states which have recently 
hoped to find their salvation in free trade with 
the ruling commercial and manufacturing power, 
are on the point of learning valuable truths by 
experience. 

It is a sheer impossibility that the free states 
of North America can attain even a mediocre 
economic position by the maintenance of existing 
commercial conditions. It is absolutely necessary 
that they should revert to their earlier tariff. Even 
if the slave states resist and are supported by the 
party in power, the force of circumstances must be 
stronger than party politics. Nay, we fear that 
cannons will sooner or later cut the gordian knot 
which the legislature has been unable to untie. 
America will pay her debt to England in powder 
and shot, the effective prohibition of war will 
correct the errors of American tariff legislation, 
and the conquest of Canada will put a stop for 
ever to the vast system of contraband foretold by 
Huskisson. 

May we be mistaken! But in case our pro- 
phecy should be fulfilled, we wish to lay on the 
free trade theory the responsibility of this war. 
Strange irony of Fate, that a theory based on the 
great idea of perpetual peace should kindle a war 
between two Powers which, according to the 
theorists, are absolutely fitted for reciprocal trade ! 
Almost as strange as the result of the philanthropic 



INTRODUCTION TO NATIONAL SYSTEM 905 

abolition of the slave trade, in consequence of 
which thousands of negroes have been sunk in the 
depths of the sea. 1 

France, in the course of the past fifty yean (or, 
rather, of the past twenty-five years, for the times 
of the Revolution and the Napoleonic War can 
hardly be reckoned), in spite of all mistakes, ex- 
crescences, and exaggerations, has made a great 
experiment in the restrictive system. Its success 
must strike every unbiassed observer. Consistency, 
however, demands that the theory should deny 
this success. Since it has already been capable 
of uttering the desperate assertion (and convincing 
the world of its truth), that England did not become 
rich and powerful by means, but in spite of her 



1 Lisfs Hole. Would it not have been wiser to hare 
the slave states first to make laws by which the owners of the 
plantations could have been obliged to allow the slaves a limited 
property in the soil which they cultivated, and to ensure them a 
limited personal freedom ; in a word, to introduce a state of nfld 
serfdom with a view to future emancipation, and thus to prepare 
and fit the negroes for complete freedom ? Were the negroes any 
less slaves under their tyrants in Africa than in the American 
plantations ? Can a barbarous race ever accomplish the change 
from natural freedom to civilization without passing through the 
hard school of servitude? Were Acts of Parliament able to 
transform the West Indian negroes suddenly into free and indas- 
trious workers? Has not the whole human race been led to 
industry and freedom by this path ? Surely England wast not so 
ignorant of the history of human civilization that she could not 
have answered these questions long ago. Her past and present 
policy in regard to abolition have manifestly quite other Motives 
than pure philanthropy. We will explain these motives later. 



296 LIFE OF FRIEDRICH LIST 

commercial policy, why should it hesitate to make 
the less startling statement that the manufactures 
of France without protection would have been 
much more flourishing than they are now? 

At all events, the assertion has been accepted 
by many as a piece of penetrating wisdom, and has 
attained wide currency, although some clear-sighted 
men of practical experience oppose it. Certainly 
the desire to obtain the blessings of freer trade 
with England is at present fairly general in France. 
And it can scarcely be denied (we shall prove this 
in more detail later) that mutual commerce would 
in many ways tend to the benefit of both countries. 
England's intention is obviously to exchange not 
merely raw materials, such as iron, but large quan- 
tities of manufactured goods in return for French 
agricultural produce and articles of luxury. How 
far the French Government and legislature will go 
in meeting this design is not yet clear. But if the 
development planned by England really takes place, 
the world will have a new affirmation or negation 
of the great question : how far under existing con- 
ditions, when one of two great manufacturing 
nations has a marked advantage over the other as 
concerns cost of production and the opening up 
of foreign markets, is it possible or advantageous 
for them to enter into free competition in their 
own home market, and what will be the result of 
such competition ? In Germany these have only 



INTRODUCTION TO NATIONAL SYSTEM 297 

become vital national questions since the com- 
mercial union. Wine is the bait through which 
England hopes to effect the conclusion of a com- 
mercial treaty with France; but in the case of 
Germany corn and timber serve the same purpose. 
But all this is still vague hypothesis; at present it 
is impossible to tell whether the foolish Tories 
can be made reasonable enough to let the Govern- 
ment give such facilities for the importation of 
German corn and timber as would be really advan- 
tageous to the union. For even now we Germans 
have made sufficient progress in commercial politics 
to make the idea that we can be paid in moonshine 
and empty promises seem absurd and insulting. 

Assuming that Parliament made these conces- 
sions, the most important questions of German 
trade would at once come under public discussion. 
Dr. Bowring's latest report gives us a foretaste of 
the tactics England will adopt in such a case. It 
will treat these concessions, not as an equivalent 
for the overwhelming and permanent advantages 
which its manufactures enjoy in the German 
markets ; not as earnest-money to prevent Ger- 
many from learning gradually to spin cotton for 
its own needs, and so obtaining the necessary raw 
material direct from the tropics in return for its 
own manufactures; not as a means of equalizing 
the constant disproportion between the respective 
imports and exports of both countries. No! 



298 LIFE OF FRIEDRICH LIST 

England will regard the privilege of providing 
Germany with cotton yarn as a jus qiicesitmn, and 
will require for every concession a new return 
amounting to nothing less than the sacrifice of 
Germany's cotton and wool manufactures, and so 
forth. It will treat each concession as a mess of 
pottage, and ask in return the denial of our birth- 
right. If Dr. Bowring did not deceive himself 
during his stay in Germany ; if he did not perhaps 
(as we strongly suspect) take Berlin politeness for 
real earnest, then those who framed the policy of 
the German commercial union are wandering in 
the paths of cosmopolitan theory. That is, they 
draw a distinction between the export of manu- 
factured goods and of agricultural products, they 
believe that they can advance national interests by 
the increase of the latter at the expense of the 
former, and they have not recognized national 
industrial development as the basic principle of 
the Union. They do not hesitate to sacrifice to 
foreign competition industries which, as a result 
of long-continued protection, have reached such a 
point that home competition has already greatly 
lowered prices, although by this sacrifice they 
destroy the [very springs of German enterprise. 
For every factory ruined by reduced protection 
or any form of Government action, is like a dead 
creature nailed up to scare away every living thing 
of the species for a wide distance around. 



INTRODUCTION TO NATIONAL SYSTEM 999 

As we have said, we are far from thinking that 
Dr. Bowring's assertions arc well grounded, but it 
is bad enough that they can be made, and are made 
openly, since as a result confidence in the value of 
protection, and with it German industrial enter- 
prise, has received a perceptible shock. His report 
also lets us realize in what form the deadly poison 
will be offered to German manufacturers, so that 
the true motive for the attempt may be hidden 
and it may attack more surely the very source of 
life. 

Our specific duties will be changed to duties 
ad valorem, so that the door may be opened 
wide to English smuggling and defrauding of the 
customs. This will be particularly the case with 
articles of general use, small individual value, and 
large bulk, that is, with those which arc the 
foundations of manufacturing industry. 

We thus see of what great practical importance 
the question of international free trade is at present, . 
and how necessary it is that a thorough and un- 
biassed inquiry should at last be undertaken to sec 
whether and how far theory and practice are guilty 
of error in this matter. Thus the problem of 
harmonizing the two might be solved, or, at least, 
a serious attempt made to solve it In very truth 
the author must explain (not from mock modesty, 
but from a real and deep-rooted mistrust of his 
powers) that it is only after a mental struggle of 



300 LIFE OF FRIEDRICH LIST 

many years' standing, after he has a hundred times 
questioned the correctness of his views and a 
hundred times found them true, only after he has 
a hundred times tested the views and principles 
opposed to his own and a hundred times realized 
their error, that he has determined to venture the 
solution of this problem. This is no vain attempt 
to contradict ancient authorities and to found new 
theories. " If he had been an Englishman he would 
scarcely have doubted the main principles of Adam 
Smith's system." 

It was the state of his own country which more 
than twenty years ago roused in him the first 
doubts in its infallibility. It has been the state of 
his own country which has induced him since then, 
in many unsigned articles, and, finally, in longer 
essays under his own name, to develop views 
opposed to the prevailing theory. And to-day it 
is still mainly the interests of Germany which have 
emboldened him to come forward with this book, 
although he cannot deny that a personal considera- 
tion has also influenced him. This is, the obligation 
he feels to make clear through a work of some 
length that he is not entirely unqualified to speak 
a word on questions of political economy. In 
direct antagonism to the theory, the author first 
seeks the lessons of history, deduces from them 
his fundamental principles, develops them, subjects 
previous systems to a critical examination, and 



INTRODUCTION TO NATIONAL SYSTEM 301 

finally (since his aim throughout is practical) 
explains the present position of commercial policy. 
For the sake of clearness, here follows an outline 
of the main results of his researches and reflections. 
Union of individual faculties in pursuit of a 
common end is the most effective means of obtain- 
ing individual happiness. Alone and apart from 
his fellows the individual is weak and helpless. 
The greater the number of those to whom he is 
socially united and the more complete the union, 
the greater and more complete is the resulting 
moral and physical welfare of the individual 
members. 

The highest union of individuals realized up to 

the present under the rule of law is in the State 

and the nation. The highest imaginable is the 

union of all mankind. Just as in the State and 

nation the individual can attain his special end to 

a much higher extent than when he is isolated, so 

all nations would attain their ends to a much 

greater extent if they were united by the rule of 

law, perpetual peace, and free intercourse. Nature 

herself gradually urges nations to this highest 

union, since through varieties of climate, soil, and 

products she forces them to barter, and through 

excess of population, capital, and talent to emigrate 

and found colonies. International trade is one of 

the mightiest levers of civilization and prosperity. 

for by the awakening of new wants it incites men 



302 



LIFE OF FRIEDRICH LIST 



to activity and exertion and passes on new ideas, 
inventions, and faculties from one nation to another. 

But at present the union of nations which arises 
from international trade is still very imperfect, 
since it can be shattered, or at least weakened, by 
war, or by the selfish action of individual nations. 
By war a nation can be robbed of its independence, 
property, freedom, laws, and constitution, its 
national character, and, still worse, of the culture 
and well-being to which it has attained. It can, 
in a word, be reduced to a state of servitude. By 
the selfish measures of foreign countries a nation 
can be hindered or impaired in the completeness of 
its economic development. 

Maintenance, development, and perfecting of 
national spirit at present is, and must be, a chief 
object of national endeavour. It is no wrong and 
selfish aim, but a rational one, in perfect harmony 
with the true interests of mankind in general. It 
leads naturally to a final alliance of nations under 
the rule of law, the universal union, which can 
only contribute to the well-being of the human 
race if it is realized in the form of a confedera- 
tion. A union proceeding from the overwhelming 
political strength and wealth of a single nation, 
and thus basing itself upon the subjection and 
dependence of all other nations, would, on the 
contrary, result in the destruction of all national 
characteristics and all international emulation; it 



INTRODUCTION TO NATIONAL SYSTEM joj 

is opposed both to the interest and sentiment of 
nations, since they all feel themselves destined to 
independence and the attainment of a high level 
of wealth and political importance. Such a union 
would only be a repetition of the former attempt 
by Rome, carried out indeed by means of manu- 
factures and commerce instead of by cold steel 
as in former times, but none the less leading back 
to barbarism. The civilization, political develop- 
ment, and strength of nations arc mainly dependent 
on their economic circumstances ; and the converse 
is also true. The more its economy is developed 
and perfected, the more civilized and powerful is 
the nation ; the higher the level of its civilization 
and power, the higher the level of its economic 
development 

In national economic development we must 
distinguish the following stages: the savage, the 
pastoral, the agricultural, the agricultural and 
manufacturing, the agricultural, manufacturing, and 
commercial. Obviously the nation which, possess- 
ing an extensive territory endowed with many 
natural resources, combines with a large popula- 
tion, agriculture, manufactures, shipping, and home 
and foreign trade, is incomparably more civilized, 
politically advanced and powerful than a merely 
agricultural state. Manufactures are the basis of 
internal and external trade, of shipping, of im- 
provements in agriculture, and consequently of 



304 LIFE OF FRIEDRICH LIST 

civilization and political power. Any nation must 
of necessity attain to universal dominion which 
succeeded in monopolizing the whole manufac- 
turing power of the world, and in keeping other 
nations at such a point of economic development 
that they produced only food and raw materials 
and carried on merely the most necessary local 
industries. 

Every nation, which attaches any value to its 
independence and continued existence, must strive 
to pass with all speed from a lower stage of 
culture to a higher, and to combine within its 
own territory agriculture, manufactures, shipping, 
and commerce. The transition from savagery to 
the pastoral state, and from the latter to the agri- 
cultural state, are best effected by free trade with 
civilized, that is, manufacturing and commercial 
nations. The transition from an agricultural com- 
munity into the class of agricultural, commercial, 
and manufacturing nations could only take place 
under free trade if the same process of development 
occurred simultaneously in all nations destined to 
manufactures, if nations put no hindrance in the 
way of one another's economic development, if 
they did not check one another's progress through 
war and tariffs. But since individual nations, 
through specially favourable circumstances, gained 
an advantage over others in manufactures, trade, 
and shipping, and since they early understood the 



INTRODUCTION TO NATIONAL SYSTEM y>$ 

best means of getting and maintaining through 
these advantages political ascendency, they have 
accordingly invented a policy which aimed, and 
still aims, at obtaining a monopoly in manufactures 
and trade, and at checking the progress of less 
advanced nations. The combination of the details 
>f this policy (prohibition of imports, import 
luties, restrictions on shipping, bounties on ex- 
ports) is known as the tariff system. 

Less advanced nations were forced by the 
earlier progress of other nations, by foreign tariff 
systems, and by war, to seek in themselves the 
means by which they could effect the transition 
from agriculture to manufactures, and to restrict the 
trade with more advanced countries aiming at a 
manufacturing monopoly (in so far as this trade 
was a hindrance to the transition) by the help of a 
customs tariff. Customs tariffs, then, are not, as is 
asserted, the invention of some theorist, they are 
the natural result of a nation's endeavours to 
secure its existence and well-being, or to obtain 
supreme power. But this endeavour is only legi- 
timate and rational when it is not a hindrance 
but a help to the nation which pursues it and 
is not in opposition to the higher aim of man- 
kind, the future federation of the world. Just as 
human society can be regarded from two points 
O f view the cosmopolitan, which considers man- 
kind as a whole; and the political, which pays 



306 LIFE OF FRIEDRICH LIST 

attention to particular national interests and con- 
ditions, so both the economy of the individual 
and of society can be regarded from two main 
aspects, as we look at the personal, social, and 
material forces by which wealth is produced, or 
the exchange value of material goods. 

Hence there is a cosmopolitan and a political 
economy, a theory of exchange values and a theory 
of productive powers, two doctrines which are 
essentially distinct and which must be developed 
independently. The productive powers of a nation 
are not only limited by the industry, thrift, 
morality, and intelligence of its individual members, 
and by its natural resources or material capital, 
but also by its social, political, and municipal laws 
and institutions, and especially by the securities 
for the continued existence, independence, and 
power of the nationality. However industrious, 
thrifty, enterprising, moral, and intelligent the 
individuals may be, without national unity, national 
division of labour, and national co-operation of 
productive powers the nation will never reach a 
high level of prosperity and power, or ensure to 
itself the lasting possession of its intellectual, 
social, and material goods. The principle of 
division of labour has not been fully grasped up 
to the present. Productivity depends not only 
on the division of various manufacturing opera- 
tions among many individuals, but still more on 



INTRODUCTION TO NATIONAL SYSTEM 307 

the moral and physical co-operation of these 
individuals for a common end. 

Thus the principle is applicable not merely to 
single factories or estates, but to the whole agri- 
cultural, manufacturing, and commercial forces of a 
nation. Division of labour and co-operation of 
productive powers exist where the intellectual 
activity of a nation bears a proper ratio to its 
material production, where agriculture, industry, 
and trade are equally and harmoniously developed. 

In a purely agricultural nation, even when it 
enjoys free trade with manufacturing and com- 
mercial nations, a great part of its productive 
powers and natural resources lies idle and unused 
Its intellectual and political development and its 
powers of defence are hampered It can have no 
shipping of importance, no extensive trade. All its 
prosperity, so far as it results from international 
trade, can be interrupted, injured, or ruined by 
foreign regulations or by war. 

Manufacturing power, on the contrary, promotes 
science, art, and political development, increases 
the well-being of the people, the population, 
national revenue, and national power, provides the 
country with the means of extending its commerce 
to all quarters of the world and of founding 
colonies, and nourishes the fishing industry, ship- 
ping and the navy. Through it alone can home 
agriculture be raised to a high pitch of development 



308 LIFE OF FRIEDRICH LIST 

Agriculture and manufactures in one and the 
same nation, united, that is, under one political 
authority, live in perpetual peace. Their mutual 
relations cannot be disturbed by war or foreign 
measures, consequently they ensure to the nation 
continued advance in well-being, civilization, and 
power. Nature lays down certain conditions for 
the existence of agriculture and manufactures, but 
these conditions are not always the same. 

As far as natural resources are concerned the 
lands of the temperate zone are peculiarly fitted for 
the development of a manufacturing power, since a 
temperate climate is the natural home of physical 
and mental effort. Yet although the lands of the 
tropics are ill-suited for manufactures, they possess 
a natural monopoly of valuable agricultural pro- 
ducts which are much in request by the inhabitants 
of temperate countries. In the exchange of the 
manufactures of the temperate zone for the pro- 
ducts of the tropics ("colonial goods") we find the 
best example of cosmopolitan division of labour 
and co-operation of powers, of international trade 
on a large scale. 

Any attempt to found a native manufacturing 
power would be most injurious to the tropics. 
Unfitted by nature for such a course, they will 
make far greater advances in national wealth and 
civilization if they continue to exchange their pro- 
ducts for the manufactures of temperate countries. 



I INTRODUCTION TO NATIONAL SYSTEM 309 

This policy, of course, leaves the tropics in a 
state of dependence. But this dependence will be 
harmless, indeed it will disappear, when more of 
the nations of the temperate zone are upon an 
equality in manufactures, commerce, shipping, and 
political power ; when it is both advantageous and 
possible for several manufacturing countries to 
prevent any of their number from misusing their 
power over the weaker nations of the tropics. 
Such power would only be dangerous and harmful 
if all manufactures, commerce, shipping, and sea- 
power were monopolized by one country. 

Then take the case of nations in the temperate 
zone possessing large territories full of natural 
resources. They would neglect one of the richest 
springs of prosperity, civilization, and power if 
they did not, as soon as they gained the necessary 
economic, intellectual, and social resources, attempt 
jto realize on a national scale division of labour and 
co-operation of productive powers. 

By economic resources -we mean a fairly ^ 
advanced state of agriculture which cannot be 
helped appreciably by any further export of its 
products. By intellectual resources we mean a 
good system of education. By social resources we 
mean laws and institutions which secure to the 
citizen safety for his person and property and Cree 
scope for his intellectual and physical powers. We 
include also well-managed facilities for transport, 



310 LIFE OF FRIEDRICH LIST 

and the absence of all institutions, such as the 
feudal system, which are destructive of industry, 
freedom, intelligence, and morality. 

It is the interest of such a nation, first of all, to 
endeavour to provide its own market with its 
own manufactured goods, and then to come more 
and more into direct intercourse with tropical 
countries, so that it can export manufactured goods 
to them in its own ships and take from them their 
own products in return. In comparison with this 
intercourse between the manufacturing countries 
of the temperate zone and the agricultural countries 
of the tropics, all other international trade, with the 
exception of a few articles, such as wine, is of little 
importance. 

For great nations of the temperate zone the 
production of raw materials and food stuffs is only 
of importance as far as their internal trade is con- 
cerned. Through the export of corn, wine, flax, 
hemp, or wool, a rude and poor country gets a 
great initial impulse towards agriculture, but a 
great nation has never attained riches, civilization, 
and power through such a course. 

We may lay it down as a general principle, that 
a nation is rich and powerful in the proportion 
in which it exports manufactures, imports raw 
materials, and consumes tropical products. 

To manufacturing nations tropical products are 
not merely food or the raw materials of industry, 



INTRODUCTION TO NATIONAL SYSTEM 311 

but before all things incentives to the cultivation of 
agriculture and manufactures. We shall always 
find that among the nations which consume the 
greatest quantity of tropical products a corre- 
spondingly large quantity of their own manu- 
factures and raw materials is produced and 
consumed. 

Four distinct periods can be recognized in the 
economic development of nations by means of 
international trade. In the first, home agriculture 
is fostered by the importation of foreign manu- 
factured goods and the export of agricultural 
products and raw materials. In the second, home 
manufactures arise by the side of foreign imports. 
In the third, home manufactures supply the greater 
part of the home-market. In the fourth, large 
quantities of home-manufactured goods are ex- 
ported and raw materials and agricultural products 
imported from abroad. 

The tariff system, as a means of advancing the 
economic development of the nation by regulation 
of its foreign trade, must constantly follow the 
principle of national industrial education. 

It is madness to attempt to help home agri- 
culture by protection, since home agriculture can 
only be advanced on economic principles by the 
development of home manufactures, and the exclu- 
sion of foreign raw materials and agricultural 
products can only depress home manufactures. 



312 LIFE OF FRIEDRICH LIST 

The economic betterment of a nation which is 
at a low level of intelligence and culture, or in 
which the population is small in relation to the 
extent and productivity of its territory, is best 
accomplished through free trade with highly culti- 
vated, rich, and industrious nations. In the case of 
such a country every restriction of trade, intended 
to plant manufacturing industry within its borders, 
is premature and injurious, not only to the welfare 
of mankind in general, but to the progress of the 
nation itself. Only when the intellectual, political, 
and economic education of the nation has so far 
advanced as a result of free trade that its further 
progress would be checked and hindered by the 
import of foreign manufactures and the lack of a 
sufficient market for its own goods, can protective 
measures be justified. 

The territory of some nations is not of great 
extent nor supplied with many natural resources, 
the mouths of its rivers are not within its 
boundaries, and it does not form a homogeneous 
whole. Such a nation cannot apply the protective 
system at all, or only with imperfect success until 
it has first supplied its deficiencies by conquest or 
treaty. 

Manufacturing power embraces so many 
branches of science and knowledge, and pre- 
supposes so much experience, skill, and practice, 
that national industrial development can only be 



INTRODUCTION TO NATIONAL SYSTEM 

gradual. Any exaggeration or hastening of pro- 
tection punishes itself by diminished national 
prosperity. The most injurious and objectionable 
course is the sudden and complete isolation of the 
country by prohibition. Yet even this can be 
justified if, separated from other countries by a 
long war, it has suffered from an involuntary pro- 
hibition of foreign manufactures, and has been 
forced to supply itself. In this case a gradual 
transition from prohibition to protection should 
be effected by deciding beforehand upon a system 
of gradually diminishing duties. Hut a nation 
which desires to pass from a non-protective policy 
to protection must, on the contrary, begin with 
low taxes, which increase gradually upon a pre- 
determined scale. (2) Taxes pre-determined in this 
way must be maintained intact by statesmen. 
They must not lower the taxes before the time, 
though they may raise them if they seem in- 
sufficient. 

Excessively high import duties, which entirely 
cut off foreign competition, injure the country 
which imposes them, since its manufacturers are 
not forced to compete with foreigners, and indo- 
lence is fostered. If home manufactures do not 
prosper under moderate and gradually increasing 
duties, this is a proof that the country has not the 
necessary qualifications for the development of its 
own manufacturing system. Duties in a branch of 



3 i4 LIFE OF FRIEDRICH LIST 

industry that is already protected should not fall 
so low, that the existence of the industry is en- 
dangered by foreign competition. Support of exist- 
ing manufactures, and protection for the essentials 
of national industry must be unalterable principles. 
Foreign competition, accordingly, can be allowed 
only a share in the yearly increase of consumption. 
The duties must be raised as soon as the foreigner 
gains the greater part or the whole of the yearly 
increase. 

__ 

A nation like England, whose manufacturing 
power has a long start of all other countries, best 
maintains and extends its industrial and commer- 
cial supremacy by the freest possible trade. In 
its case cosmopolitan and political principles are 
identical. This explains the preference of dis- 
tinguished English statesmen for absolute free trade 
and the unwillingness of wise financiers in other 
countries to apply this principle under the existing 
conditions of the world. For the last quarter of a 
century the system of prohibition and protection 
has worked to the disadvantage of England and 
the advantage of her rivals. Most disadvantageous 
of all are its restrictions on the importation of 
foreign raw materials and food stuffs. 

Commercial unions and commercial treaties are 

v the most effective means of facilitating intercourse 

between different nations. But commercial treaties 

are only legitimate and valuable when they involve 



INTRODUCTION TO NATIONAL SYSTEM 31$ 

mutual benefits. They are injurious and illegiti- 
mate when the development of a manufacturing 
power in one country is sacrificed in order lo gain 
concessions for the exports of its agricultural pro- 
ducts to another country. These are "Mcthucn- 
treaties," or " lion-treaties." (3) Such a "lion" 
treaty was that concluded between England and 
France in 1768. (4) All the offers which England 
has made since then to France and other countries 
are of the same character. Even if protection 
temporarily enhances prices, yet it ensures cheap- 
ness in the future as a result of home competition. 
For a perfectly developed industry can fix a much 
lower price for its products than the cost of trans- 
port and of trader's profits allow when raw 
materials and food must be exported and manu- 
facturers imported. 

The loss which a nation incurs by protection 
is only one of values, but it gains powers by which 
it is enabled to go on producing permanently in- 
estimable amounts of value. 'This loss in value 
should be regarded merely as the price paid for 
the industrial education of the nation. " 

Protection to manufactures does not injure the 
agriculturists of the protected nation. Through 
the growth of a home manufacturing power, wealth, 
population, and with them the demand for agri- 
cultural products will vastly increase. Conse- 
quently there will be a considerable rise in the 



316 LIFE OF FRIEDRICH LIST 

rents and selling prices of landed property, while 
as time goes by the manufactured products re- 
quired by agriculturists will fall in price. These 
gains will outweigh the losses sustained by the 
agriculturists through the temporary rise in the 
prices of manufactured goods. 

Similarly, both home and foreign trade gain 
from protection, since both are of importance only 
in the case of countries which can supply their 
own markets with manufactures, consume their 
own agricultural products, and exchange their own 
manufacturing surplus for foreign raw materials 
and food stuffs. Merely agricultural nations of the 
temperate zone have an insignificant home and 
foreign trade; foreign trade in such cases is 
generally in the hands of the manufacturing and 
commercial nations who hold intercourse with 
them. 

Moderate protection does not grant a monopoly 
to home manufactures, only a guarantee against 
loss for those individuals who have devoted their 
capital, talent, and labour to new and untried 
industries. There can be no monopoly since home 
competition takes the place of foreign, and it is 
open to each member of the state to share in the 
benefits it offers to individuals. There is merely 
a monopoly for the inhabitants of one country 
against those of foreign countries, who themselves 
possess at home a similar monopoly. But this 



INTRODUCTION TO NATIONAL SYSTEM 317 

monopoly is useful, not only because it wakes pro- 
ductive forces lying idle and dormant in the nation, 
but because it attracts to the country foreign pro- 
ductive forces (material and intellectual capital, 
entrepreneurs, skilled and unskilled workmen). 

In the case of many nations of long standing 
culture the export of raw materials and agricultural 
products, and the import of foreign manufactures, 
can no longer benefit their powers of production. 
Such nations suffer many serious evils if they do 
not foster their own manufactures. Their agri- 
culture must necessarily be crippled, since, if 
important home manufactures arose, the increased 
population would find employment there, and the 
consequent great demand for agricultural products 
would make agriculture on a large scale very 
profitable and favour its development But in the 
case supposed the surplus population could only 
be employed in agriculture. The result would be a 
subdivision of land and increase of small cultivators 
which would be most injurious to the power, 
civilization, and wealth of the nation. 

An agricultural population consisting for the 
most part of peasant proprietors can neither coo- 
tribute large quantities of products to the home 
trade nor exercise an important demand for manu- 
factures. In such a case the consumption of each 
individual is limited for the most part to what he 
himself produces. Under these conditions the 



3i3 LIFE OF FRIEDRICH LIST 

nation can never develop any satisfactory system 
of transport, and can never possess the incalculable 
advantages arising from such a system. The 
inevitable result is national weakness, moral and 
material, individual and political. These con- 
sequences are the more dangerous when neigh- 
bouring nations pursue the opposite course, when 
they advance as we fall back, when yonder the 
hope of better things to come increases the courage, 
power, and enterprise of the citizens, while here 
courage and spirit are more and more depressed 
by the outlook into a hopeless future. History 
affords striking examples of whole nations falling 
into ruin because they did not know how to under- 
take at the right moment the great task of planting 
their own manufactures, and a powerful industry 
and commerce, by which they could insure to 
themselves intellectual, economic, and political 
independence. 



NOTES TO THE "INTRODUCTION" 

Page 293. (i) Shudders at. List borrows his phrase from Latin 
and writes " perhorrescirt." 

Page 313. (2) Scale. See Memoir, chap. iv. p. 132. 

Page 315. (3) Lion treaties, i.e. treaties in which one party is 
in much the stronger position, like the lion of Aesop's Fables. 

Page 315. (4) 1768. Probably a misprint for 1786, the date of 
the Eden Treaty. 



BIBLIOGRAPHY 

A. WRITINGS or LIST. 

1817. System der Gemeindewirthschaft. (I 
Archiv, Band II., Heft a.) 

1817. Gutachten iiber die Errichtung eiocr staatswirtacfaA. 

lichen Fakultat (Gesammttte SfAri/im, pp. 1-14.) 

1818. Die Staatskunde und Staatspraxis Wurttembcrgs. 
1818-19. Contributions to Der Volksfrautd out &fcMfc*. 
1819-20, Petitions, etc., in the service of the Handdmnia. 

(Gesammelte Schriften^ pp. 15-62.) 

1819. Organ fur den dcutschen Handds- u*d 

1820. Petition on behalf of his Reutlingen 
1823. Themis. 2tn. Baodchen. Friedrich 

furchtsvollc Denkschrift an Seine Majettil den 
Konig von Wurttemoerg. Zurich. 

1827. Outlines of American Political Economy. Phila- 

delphia. 

Appendix to the Outlines. Philadelphia. 
Speech made at the dinner of the Pennsylvania Society. 

Philadelphia. 

1828. Correspondence with Joef von Baader published in 

the Augsburger AOgematu Zat**g. 

1829. Mittheihingen aus Nordamehka. Hamburg. 
1833. Uber ein sachsisches Eisenbahn-SyflMfc 

1835. Contributions to the Staattlexicon. Vok. i n ti.. and iv. 
1835-6. Das 

No. 1-35. 



3 20 LIFE OF FRIEDRICH LIST 

1838. Das deutsche National-Transport (reprinted from 

Staatslexicon). 

1841-2. Das Nationale System. 
1843-6. Das Zollvereinsblatt. 
1846. Memorial concerning an alliance between Great Britain 

and Germany. 
1877. A series of List's letters 1824-5, edited by Wilhelm 

Roscher in Nord und Sud. Band 3. 

CONTRIBUTIONS TO 

Revue Eneydop'cdique, 1831. 
Constitutionnd) 1831, 1839. 
A ugsburger Atlgemeine Zeifung, 1837, 1839, 1840, 1841, 

1842, 1844, J 847. 
Deutsches Vierteljahrschrift^ 1840, 1841. 

EDITIONS AND TRANSLATIONS OF His WORKS. 

1850-1. Gesammelte Schriften, herausgegeben von Ludwig 
Hausse. 3 Band. 

i. Friedrich Lists Leben. 

a. Kleinere Schriften. 

3. Das nationale System. Stuttgart and 

Tubingen. J. G. Cotta. 

1853. Das nationale System der politischen Oekonomie von 
Friedrich List. Siebente Auflage. Mit eine his- 
torischen und kritischen Einleitung von K. Th. 
Eheberg. Stuttgart. J. G. Cotta. 
Ueber ein sachsisches Eisenbahn-System. (With an 
introduction by O. Brandt.) Philipp Reclam, 
Leipzig. Universal-Bibliothek, 3669. 

1856. The National System, translated with notes by G. A. 
Matile, with a preface by Stephen Colwell. Phila- 
delphia. 



BIBLIOGRAPHY 

1857. Systeme National* Translated by Hoh "Mtttel 
1860. Protection as a national system sotted far Victor* 

(extracts from List), with preface by G. W. Cole. 
1885. The National System, translated, with brief 

by Sampson S. Lloyd. I. 



1904. New Edition, with introduction by Professor J. S. 

Nicholson. 



B. WORKS AND ARTICLES ox LIST OR COXTAIXIVC 
REFERENCES TO HIM. 

Allgemeine Deutsche Biographic. Art List 
Handworterbuch der Staatswissenschaften. Art List (by 

Eheberg). 

Schonberg. Handbuch. Art. List (by Hans von Schael). 
Dictionary of Political Economy. Art List (by J. K. Ingram). 
History of Political Economy. J. K. Ingram. i84S. 
Labor Cyclopaedia of Political Science. Art List (by Joseph 

Gamier). 

Ludwig Hausser. Friedrich Lists Leben. 1850. 
Carl Jentsch. Friedrich List Berlin, 1901. 
Julius Weise. Friedrich List, ein Vorlaufer uod eia Opfsr ttr 

der Vaterland. Stuttgart (no date). 
Friedrich Goldschmidt. Friedrich List Dcutscblands grosser 

Volkwirth. Berlin, 1870. 
A. Staub. Friedrich List Munich, 1879. 
Arthur Rafialovich. Fre^le'ric List 
Wilhelm Roscher. Zur Erinnerung an Friedrich List AW 

und Sud. Band 3. 1877. 
Dr. Niedermuller. Die Leipxig-Dresdener 

Werk Friedrich Lists. Leipzig, 1880. 
Hans Schnurbein. Friedricfa List ah tiscubahnpoHtikfr. 1904. 
Louis Katzenstein. Friedrich List Zor 

5o-jahrigen Todestag. Berlin, 1*96. 



322 



LIFE OF FRIEDRICH LIST 



Dr. Bruno Hildebrand. Die National-Oekonomie der Gegen- 

wart und Zukunft, 1848. 
A. Wetzel. Friedrich List als Nationaler Erzieher. Stuttgart, 

1898. 
Dr. K. Th. Eheberg. Friedrich List. Festrede zur Enthiillung 

seines Denkmals in Kufstein. Munich, 1908. 
Dr. Karl Menger. Article in Neue Freie Presse, August 6, 1889. 
Georg Stamper. Friedrich List (Westermann's Illustrierte 

deutsche Monatshefte, vol. 86. August, 1899. 
K. H. Bruggeman. Dr. Lists Nationales System der poli- 

tischen Oekonomie kritische beleuchtet Berlin, 1842. 
K. H. Rau. Zur Kritik iiber F. Lists Nationales System. 

Heidelberg, 1843. 

John Austin. Edinburgh Review^ vol. 75. July, 1842. 
Henri Richelot. L' Association douaniere Allemande. 1845. 
Dr. Julius Kautz. Die geschichtliche Entwickelung der 

National-Oekonomie und ihrer Litteratur. Vienna, 1860. 
W. Roscher. Geschichte der National-Oekonomik in Deutsch- 

land. 1874. 
Eugen Diihring. Die wissenschaftliche Bedeutung Friedrich 

Lists. (Deutsche Vierteljahrschrift^ 1867.) 
Eugen Diihring. Kritische Geschichte der Nationalokonomie 

und des Socialismus. Leipsic, 4th edition, 1906. 
Gustav Schmoller. Zur Litteratur-Geschichte der Staats- und 

Sozial-Wissenschaften. 1888. 

Wolfgang Menzel. Denkwiirdigkeiten. Leipsic, 1877. 
Dr. Max Holtzel. Ueber Friedrich List. (Reprint from 

Preussische Jahrbucher, 1903.) Aus der Geschichte der 

deutscher Eisenbahnen. Deutsche Eisenbahn-Beamten 

Zeitung. August 31, 1905. 

Friedrich List Neues Tagblatf, Stuttgart, September 4, 

1905. 
Dr. Curtius Kohler. Problematisches zu Friedrich List. Mil 

Anhang. Lists Briefe aus Amerika. Leipsic, 1908. 
Dr. H. Losch. Ein deutscher Amerikafahrer, in Patria, 1906. 



BIBLIOGRAPHY 
C i. WORKS ON AMERICAN PROTECTION, UTECUU.* 

BEARING ON THE PERIOD 1816-30 

1 . w. Taussig. Tariff History of the United State*. 
Ugo Rabbeno. American Commercial Policy. 

and Co.) 
C. L. Elliot The Tariff Controversy, 1789-1833. 

Stanford Junior University Monographs, 1891.) 
Alexander Hamilton. Report on Manufacture*. 1791. 
Daniel Raymond. Thoughts on Political Economy. Balti- 
more, 1820. 
C. P. Neill. Daniel Raymond, an early chapter in the 

of Economic Theory in the United State*. 

1897. 
Matthew Carey: Many tracts and pamphlets on the tariff 

controversy. 

Miles' Weekly Register, 1819-30. 
Congressional Debates, 1827-8. 
G. H. Harrower. Alexander Hamilton als Nationalnkonosi. 

Halle, 1887. 
O. V. Deuster. Die Entwickelung des amerikanischen ZosV 

tarifsystem. Leipsic, 1885. 
E. J. James. Studien iiber den amerikanischen Zolkarsf, 

Halle, 1877. 

C 2. ON THE RELATION BETWEEN LIST AND HENRT C 

CAREY. 
Henry Carey-Baird. Carey and two of his recent critic*. 

(Proc. Atner. PhiL Soc., xxix. 1891.) 
Knies. Politische Oekonomie, pp. 44 M* 
(aistav Schmoller. Zur Litteratur-Gcschichte, etc. i 
Eugen Diihring. Kritische Gcschichte der NatiomlokuuQail 

1890. 
J. W. Jenks. Henry C Carey als National-Ockoi 

lung Jena, 1885. 



INDEX 



AARAU, 26 

Academy, essay for French, 82, 

in, 126 
Achalm, I, 2 
Adams, John Quincy, 49 
Adler, Der, 36 
Africa, 98 
Agriculture and manufactures, 37, 

40, 112, IIS, 121, 163, 206, 304, 

306.315 

Agriculture, protection to, 116, 

131,3" 
" Agriculture, Relation of, to 

Industry and Trade," 9$ 
Albert, Prince, 103 
Atlgemeint Zeihtng, 59, 82, 8$, 86, 

95. "3 

Alliance between Great Britain and 

Germany (memorial on), IO2 ff. 

Alsace, 28, 30 

Altona, 72 

America, North. See under United 
States 

American Consulship : in Hamburg, 
64 ; in Leipsic, 67-71, 78 

"American Economist" (pro- 
jected), 52 

American economists, 1 1 1 ff. 

"American Political Economy, Out- 
lines of." Sttunder Outlines, etc. 

American System of Politkal 
Economy, 149 ff., 168, 201, 284 

American towns, rapid growth of, 6l 



Appendix to " ftrtliaw," M$ C 
Appooyi, 98 
Arnold!. 59, 14$ 
Asperg. 10, 23. 7 

AH***. 9. 10$ 

Austin, John, 130 

Austria, 68, 77, 1*9, lj|j Lhft 

leaning towards, 961 vUto to, 

18.9$ 

BAADU, Joacf voo, 59 
Baden, 12, 15, 19, 14. 71. 144 

BadRippokbaa.97 
Baldwin, Chief Jastkx. 253 
Baltimore, 112 

iysten and MM 



Basle. 26 
Bauerrets, 19 
Bavaria, 12, 15, 



19, 59. 6I lot, 



Belgium, 6$. 68. 70. **. 94. I 9 
Berlin, 18, 77, 9J. J9 
Berlin Decrees. 12 



3'S 



Black Forart, 97 
Btanqmi,84 
BUabeoren, 3 
Bolbec, 33 

Boston Report, 47* ** 
Bounties. 116 
Bowring. Dr.. lot. 97 
Bratil, 247 

v 3 



326 



INDEX 



Bruggeman, 122 
Brunswick, 15, 68 
Brussels, 66, 82, 94 
Budgets, annual, 22 
Buller, IOI 

Bund. See under Federal Assembly 
Bunker's Hill, 34 
Bunsen, Chevalier de, 104 
Bureaucracy, German, 3, 6, 8, 
64, 92 , 

CANADA, 103, 294 
Canals, 58, 206, 210, 214 
Canning, 178 ff., 186, 245 ff., 254, 

283 

Cannstatt, 89 
Cape, 60 
Capital, 191, 238 ; various kinds of, 

i 88, 196 

Carey-Baird, Mr., 119 
Carey, Henry C., 41, 113, 118 ff. 
Carey, Matthew, 41, 45, 47, 50, 54, 

62, in, 113, 117, 156 
Carlsruhe, 1 8, 82 
Cassel, 88 
Castlereagh, 250 
Chaptal, Count, 177, 1 86 
Charlemagne, 60 
Chevalier, Michel, 66 
Clarendon, 103, 104 
Clay, Henry, 34, 43, 45, 117 
Coal (anthracite), 55, 57, 63 
Cobden, 99, IOI, 105, 157 
Colbert, 172 

Commercial Congress, 19 
Commercial policy, 287 ff. 
Commercial treaties, 20, 70, 105, 

297, 3H 
Commercial Union, German. See 

under Zollverein 
Commons, House of, 101 
Competition,effects of, 220, 314 
Congress (United States), 43, 48, 

158, 285 



Constitutional government, 5, 10 
Constilutionel, 86 
Consumption (productive), 207 
Continental system, 174 
Cooper, Thomas, 42, in, 117, 

150, 156, 160, 161, 172, 215, 

235, 263, 283 

Co-operation, economies of, 193 
Corn Laws, 12, 39, 70, 85, 86, 97, 

loo, 254 
Corporations, 9 
Cosmopolitical economy, 9, lo, 

112, 125, 155, 159, 203, 219 ff., 

229 ff., 292, 306 
Cost of production, 231 ff. 
Cotta, Freiherr von, 13, 20, 24, 

84, 90, 123 

Cotton, 1 88, 214, 263 ff., 288 
Cotton, French consumption of, 270 
Crises, in United States, 19, 78 
Custom duties, 132 
Cuthbert, Mr., 65 

DANUBE, 59 

Darmstadt, 15, 19, 144 

Denmark, 73 

De Pradt, 12 

Deutsches Vierteljahrschrift, 86 

De Witt, 54 

Dinner to List by Pennsylvania 

Society, 44, 273 
Dresden, 73 
DUhring, 124 
Dupin, 282, 286 

EAST, trade routes to, 60 

Eberhard, Duke, 2 

Echaz, I, 2 

Economic progress, stages of, 115, 

121, 123, 128, 303, 311 

Economy, 35 
Eden Treaty, 129, 315 
Edinburgh Review, 131 
Edward III., 172 



INDKX 



Egypt, 98, 103, 263 

Khcberg, Prof. TOO, 116, 130, 133* 

'45 

Elizabeth, Queen, 173, 6 
Elliot, 77 

Embargo Act, 38, 109 
Emigration to United States, 63, 

199 

Empire (Austrian), 96 
Empire (German), 119, 133 
England, visits to, 25, 99 ff. 
England and America, 38, 98, 109, 

127, 320, 294 
England and Germany, 12, 68, 

127, 297 
England, List's attitude to, 5, 64, 

77. 85. 9i, 100, ioa, ia6, 1*9, 

339, 3U 
" English Commercial Policy," 97, 

248, 268, 288 
" English Theory of Free Trade," 

86,97 

Euphrates, 98 
Expropriation law, 66 

FEDERAL ASSEMBLY (German), 
13, 16, 17, 19, no, in, 142, 

MS 

Federation, world, 305 
Finance, German, 8 
Fischer, Gustav, 20 
Fisher, Redwood, 48, 62 
Fluelen, 26 
Forsyth, John, 67 
Fox, Charles, 172 
France, 17, 63, 68, 82 ff., 85, 103, 

126, 140, 226, 281, 295 
Francis, Emperor of Austria, 18 
Frankfurt, 13, 88; (petition), 17, 

136* 

Franklin Institute, 62 
Frederick II., 172 
Free Trade, 10, 69, 86, 97. '", 

112, 128, 134, 139. 1*3, "I, 



304. It*. 
IS, 90, fa 



Piwch in* 
371 



wfca Uakrt 



GAMILM, 112 

Gtrmum 

ArVwW, 17, IT 
German railway 

Railway* 
" Germans, 

Unity o/, 97 
Germany, rconomk Candidas e/. 

li, 86, 1x4, 131, 137 f., tyj, 

160,281.300 
Germany and Unted Stairs io, 

no 

Gladstow, 92, 98 
Gotha.88 
Gottingen, 13 
Goorney, de, 213 
Government interference, 164 
Greif, Martin, 1 08 
Grey, Earl, 1 86 

HAMIURO, 67, 7*, 7> . 9. 1*9. 

39 
Hamilton, Alexander, jS, 41, 44. 

...... 4<f. i>7. "S*. >57. (7> 

Hamilton (of Sootb "iinT^M). 51 

Hunmerich, 72 

HandiliMUJB, 14 ft, 17. 85, no, 

116. 113. 130, 175 
Hanover, 15. 17. 61. 176 
Hanse towns, 15. 6S, yt, i6, 140. 

US* 75 7* 
Hat kot t, FriU, 74, 7 
Harkort. GostaT. 74 
Harmony, 3$ 



H . r i ' . " ^ 



328 



INDEX 



Hausser, 27, 63, 64, 78, 136 

Havre, 32.63,65, 271 

Heine, 87 

Hesse Darmstadt, 15, 19, 144; 

Meiningen, 15, 144 
Hiester, Dr., 57 
Hohenstaufen, I 
Hohenzollern, I 
Holland, 68 
Holtzel, Dr. Max, 81 
Holy Alliance, 183 
Home market, 115, 121, 230 
Hungary, 95, 96 
Huskisson, 145, 178, 245, 284, 294 



IBRAHIM PASHA, 101 

Import duties, 313 

India, overland route to, 60, 99, 

103 
Individual economy, 150, 155, 203, 

212 ff. 

Infant industries, 38 
Ingersoll, C. J., 42, 47, 54, 62, 

156, 274 

"Insular supremacy," 127 
Internal trade, importance of, 235 
International trade, 301 



JACKSON, ANDREW, 49, 54, 62, 70 

James, E. J., 39 

Jefferson, 108, 135, 172 

Jena, 88, 89 

Joseph II., 172 

Jury, trial by, 10 



KEPLER, 127 

Keynes, Dr., 169 

Knies, 122 

Kolb, Dr., 82, 89, 107, 123 

Kossuth, 95 

Kufstein, 106, 108, 133 

Kurz, Hermann, 2 



LAFAYETTE, 25, 28, 29, 34, 44, 

"3. 273 

Land prices and credit, 258 ff. 

Land, value of, 51, 98 

"Land Question, Small Holdings, 
and Emigration," 95 

Lauderdale, 1 12 

Leibnitz, 157 

Leipsic, 13, 15, 73, 82, 88, 94, 175 

Leipsic-Dresden Railway, 73 ff. 

Linen industry, 28 

List, brother of, 3, 6 ; father of, 2, 
6 ; mother of, 6 

List, Caroline (Neidhart), 14, 31 

List, Caroline, 14, 87 

List, Elise, 14, 90 

List, Emilie, 14, 82, 87 

List, Oskar, 14, 82, 88 

List (letters from), 24, 25, 29, 30, 
31. 32. 54. 5 8 > 59, 81, 84-86, 87, 
loo, 107 

Little Schuylkill Mine and Rail- 
road, 55, 57 

Livingstone, Edward, 43, 62 

Local self-government, 7, 10 

London, visit to, 24, 100 

Louis Philippe, 82 

Lubeck, 73 

Ludwig of Bavaria, 60 

MAASSEN, 18 
Macchiavelli, 127 
McCulloch, 54, 127, 156 
McDuffie, 50-52, 158 
McGregor, 101 
Machinery, 207 
Madison, James, 43, 135, 285 
Main, 59 

Mainz, railway from, 95 
Malbranc, 4 
Malthus, 54 

" Manufactures, Report on" (Hamil- 
ton), 38, 115, 156, 157, 170 ff., 

201, 210, 227, 284, 286 



INDKX 



-' 



Manufacturing power, 223, 227 

Marshall, Professor, 118 

Martens, von, 17 

Mar wit/, 124 

Maximilian I., 2 

Mecklenburg, 68 

"Memorial concerning a Chair of 

Politics," 7 

Menzel, Wolfgang, 26, 27, 89 
Meran, 106 

Mercantile theory, 123, 127, 292 
Methuen treaty, 179, 293, 315 
Metternich, 10, 81 
Mets, 25 
Mexico, 205, 209 
" Mittheilungcn ausNordamerika," 

47. 57. 58. 59. 6l 

Money, 209 

Monopolies (do not arise from pro- 
tection), 233, 316 

Monteagle, Lord (Spring Rice), 101 

Montesquieu, 4, 277 

Moser, Justus, 88 

Muller, Adam, 122 

Munich, 106 

NAPLES, 126 

Napoleon, a, 53, 70, 249, 172, 184 

Napoleonic Wars, 12, 39, 71, 86, 

109, 13' 

Nassau, 15, 119, 144 
Nation, a real entity, 215 ff. 
National economy, 10, ill, 121, 

125, 128, 150, 155, 162, 203, 

212 ff., 302 

"National System," 9, 10, 36, 42, 
55. 78,84, 89, 90, 97, 112. 116, 
1 20, 14$ ; (summary), 122 ff. 

Navigation Acts, 293 

Nebenius, 1 8, 85, no, 124 

Neckar Valley, 7 

Neidhart, Karl, 14 

Ncill, C. P., 113 

Netherlands, 126, 219, 226 



Ntw Inland. 40,4* 
Newtoa, i7 
New York, jj 
Nkboboo. tVr.f, Bl . ijo 

NUes. Ilnrkids JCMI4, Ifft, no 
W Wkfy *+*. ,14, ,41, 

156 

Noo-Itte?com Art, j& toy 
Nuremberg, 17 



" OUTLINES Of 
Economy," 43, no, lao, 13$, 
147 ff., 274 

< 'we:'., }: '<:', '/> 

PAHS, 2$, 2*. 32, 64. 65, (7 
Parsimony, 208, 216 
Patent Law, 18 
Peace and free trade, 154 
Peel, Sir R., 92, 97. 103, 104 
Pennsylvania, 30, 56 
Pennsylvania Society lot PFOMOIMMI 
of Maoaactwes, 41. 44, 46, 54, 

"3. 135. 14*. 5* 
Persian GolA 98 
Philadelphia, j; 



}. 161 ; 



Physiocrats, 127 

Pitt, 172, 185, 186,245 

Pittsborg, 35 

Poland, 185 

Political Economy (tu 

(theory oO. 290 
PoliidwiMnsrheft. 114 
Population (United 

201,203 

Port Clinton, 55. 57, 61 
1'ortagal, 114, 126, 147 
Postal system, 17, 94 
Prtxkws metak, export of, 1 1 1 



, Si 

Pres*. freedom of. to 
Prices ad protection 31 $ 



330 



INDEX 



Productive and unproductive 

labour, 112, 127, 208 
Productive powers, theory of, 55, 

127, 128, 1 60, 187, 196, 207, 

3o6|ff. 

Prohibition, 313 
Protection, 38 ff., 49, 96, 128, 205, 

3I3. 3S 
Prussia, II, 12, 17, 18, 19, 77, So, 

93, 96, 102, 103 
Prussian Tariff, 143, 145 

QUESNAY, 274, 289, 292 

RABRENO, no, 121 

Railways : in England, 25, 55, 56 ; 
in France, 63, 66, 83 ; in Ger- 
many, 59 ff., 71 ff., 99, 129, 
133 ; in United States, 55 ff., 
206, 210, 214 

Railway Journal, 77 

Randolph, John, 50 

Rapp, 38 

Rau, 122 

Raw materials, 310 

Raymond, Daniel, 112, 113 

Reading, 36 

Representative Government, 10, 92 

Retaliation, 13, 17, III, 132, 144 

Reutlingen, I, 6, 21, 22 

Revolution, French, 17, 183 

Revue Encyclopidique, 66, 7 1 

Rhine, 15, 65 

Ricardo, 52 

Richelot, 119 

Richmond (Virginia), 29 

Rives, Mr., 65, 71 

Robertson, J. M., 129 

Roscher, 132 

Rossi, 84 

Rotteck, 73, 124 

Rousseau, 4, 5, 157, 276 

Rush, Richard, 25, 43, 45, 283 



Russell, Lord John, 101 
Russia, 69, 86, 98, 103, 114, 205, 
288 

ST. CRIQUE, Comte de, 270 

St. Pierre, Abbe, 154, 157 

Saxony, 19, 76, 78, 81, 144 

Say, J. B., 4, 48, 53, 127, 149, 
160, 163, 165, 168, 172, 177, 187, 
191, 201, 233, 235, 251,261, 274 

Schelkingen, 3 

Schiller, 32 

Schlayer, 4, 89 

Schmoller, Professor, 118 

Schnell, 18 

Schuylkill Canal, 55 

Schwatz, 107 

Sea and national life, 92 

Senate (United States), 65 

Serra, 127 

Shiel, 101 

Slavery, 213, 249, 266, 295 

Smith, Adam, 4, 36, 45, 48, 52, 53, 
85, no, 112, 115, 124, 127, 148 
ff., 160, 172, 181, 187, 201, 218, 
233, 235. 245. 251, 261, 274, 289, 
292 

Smuggling, 139, 141 

Soden, Count, 176, 185 

South American Republics, 165, 
180, 183, 186, 205, 246 ff., 252. 
268 

South Carolina, 285 

Southern States, 40, 49, 261 fi"., 
284 

Staatslexuon, 67, 72 ff., 88 

State, power of the, 301 

Steadiness of industry, 237 

Stephenson, 55 

Steuart, Sir James, 54, 112 

Strasburg, 23, 63 

Stuttgart, 6, 19, 27, 90 

Suez Canal, 60 
Swabian Alb, I 



INDKX 



J3 



Swabian Bund, 2 
Switzerland, 26, 139 
Syria, 98 

TAMAQUA, 57, 61 

Tariffs, 127, 229, 305 ; (German), 
n ; (American), 38, 39, 41, 47, 

49, 7 
Taussig, Professor, 38, 40, 47, 49, 

117, 156 

Taxation in Wurttemberg, 7, 21 
Tegernsee, 106 
Tkfmis, 26 
' Theory and Practice of Wurttcm- 

berg Administration," 8, 10 
Thiers, 86 

Thuringian States, 20, 88 
Tobacco monopoly (French), 71 
Togel, Dr., 06, 99 
Tropics, economic condition of, 

128, 308 ff. 
Tubingen, 4, 7 
Turgot, 48, 172, 185 
Turkish Empire, 98, 268 
Tyrol, 106 

" UEBER ein sachsisches Eisen- 
bahn-System," 57, 58, 6l, 75 

Vhland, 2, 23, 32 

Ulrich, Duke, 2 

United States, 24, 28, 33, 6 1, 86, 
98, 103, 109, 126, 153, 160, 166 
ff., 194 ff., 220, 239, 279, 288, 
294 (and Germany), 109-1 1 1 

VALUE, theory of, 55, 112, 306 
Van Buren, 65, 70, 85 
Vienna, 1 8, 80, 96, 136, 175 
Villclc, M. dc, 178 



Virti.ua, at4 



*M**| 

VOB Moltkt, IM 

WAUHCK, 21 

WaacvmM^ 5, 7, 9. to. it 
War aad plMaglluB. 131, 1*3, tta, 

,3M 
Wa^ftoa.63 



Watt, 207 

\Vnlth, nalioo&l. in 

M Wealth ol Nation" 1 50, 156 

Webw, Enul, 13, 17, it, $9 

WdMUr, DaaM. 50 

Weimar, 88,19 

Welcker, 72 

\Vellingtoo, Duke of, 101 

Western States, 200 

WwtHONHM, Lord, 93 

Westphalia, 75 

\ViI.lba.!. 9J 

William I. (EsBperor). 120 

Wooden railroad*, 57 

Wool, doty oa, 41. 4* 

WooUea trade, 189, * 

Wocld-Fedefatioo. 153 

\\urtiembtrf, 1, 12, 19, tl. H 94. 
144 ; (atsembty). 22, tot ; (!"" 
ment), it, 21, 31. $$ 7*> < i 
(kiag), 6, II, IS. 33- 

Wurttembrrtischo Aitfcif,- 7 



ZOLL coagsiMS, 90, 99 

Zolhrcfcia. to, 20. 61, 1$. 9J. * 

103, 124, 127. IJ3 
Z*lhvn*tt.<*, 90-43. M> + 

97,99, 101,105.109. 113 



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